|
|
Rebates vs. 0% Financing: |
|
Looking for the best rate to finance the purchase of your vehicle
can seem like a minefield of choices. How does rate factor into a monthly
payment that is both affordable and reasonable?
Let's look at what is
often the most sought after rate: 0% Financing. Who can beat zero?
One would think 0% is the best available rate and question
why would anyone want to pay anything above a rate of zero?
Here are some
important factors to strongly consider:
- 0% is only offered to consumers with the very best credit history
- 0%
forces you to choose between the rate or the rebate, you cannot
have both
- 0% is generally used on short-term loans such as 36 months
- 0% is often
used for slow selling models that have trouble selling or are in
stock
- 0%
may have hidden application or prepayment fees which further reduces
savings
You negotiate a purchase price with a local dealership for $23,000
with an offer of 0% financing for 60 months or a $2,000 rebate. These
are
both attractive offers but you have no idea which one offers the greatest
benefit for you. We can show you how to break these options down:
|
|
Purchase Price @ $23,000
- Option 1 - financing with 0% interest:
- $23,000 loan for 60 months
@ 0% financing
- Payment = $383/month
- Option 2 - Credit union financing with a $2,000
rebate:
- $21,000 loan (after
$2,000 rebate) for 60 months at 1.99% (sample credit union rate)
- Payment
= $368 per month
Using this example, it is quite clear the rebate option
along with credit union financing will help you save more money. In
this
example, you
will save $15 per month and when you add this up over the
life of the loan
(60 months), you will save $900.
If you are still not sure
which is the right option for you, please contact us and we will gladly
assist you in finding
the right
fit.
|
|
The Right Loan
Doing business with your credit union puts you in the driver’s
seat. It’s a different experience working with a credit union
than a large bank. For starters, the credit union is a not-for-profit
organization established by members for members. That means you! Once
you qualify for a loan with your credit union, you’re a member
of a very special financial institution.
Here are some of the perks
of getting a loan with a credit union:
Auto Loans
Credit unions in general offer better auto loan rates than
major banks. It is always a good idea to check with your credit union
first to obtain
a loan before shopping for a new or pre-owned vehicle. Often
you will find better rates and a more personalized approach.
Lower Rates
Correct, rates at credit unions are generally lower. The
reason, credit unions pass savings from their not-for-profit status
throughout
their
product lines. As an example, credit unions offer members higher
rates on savings accounts and lower rates on loans and credit
cards. They are not looking to make a profit off their members.
Loan
Approval
Credit unions exist for their members. They are more likely
to understand and listen to your circumstances when applying for
a loan; sometimes
adjusting terms of loans accordingly. While the loan approval
process is similar, a credit union is much more approachable and
willing
to work with you. Credit unions strive to provide a personalized
approach
that values the member and the member's financial situation.
Customer
Service
Members report high satisfaction rates when conducting business
with credit unions. Did you know the mission of a credit
union is to provide
members with affordable financial services because their
goal is not to profit from a member?
Borrowing
If you have ever been turned down by a major bank, you will
be surprised to learn how flexible and happy your credit
union is
to do business
with you. If you are self-employed, it can be tough
to get financing or approval for anything from a major bank. Working
with a credit
union will maximize your income by saving you more
while
increasing your
savings!
|
|