0% Financing or Rebate: Which Is The Better Deal?

Did you know that in the auto industry, there are two “peak” buying seasons?

One is now through the end of May, and the second from September through November. These are the two times of year that a lot of people start looking for a new or used car, and the demand can actually increase the price of vehicles by up to 10 percent.

But when you need a new car, you can’t always wait. Here are some money-saving tips whether you’re buying new or used.

When you go to the dealership, you’ll probably be faced with the choice between taking a 0% loan or taking rebates and cash back from the dealership. Which is the better deal?

What you decide to do depends on whether you’re paying for a car in full or taking out a loan. If you’re taking out a loan, do you want to pay as little as possible for the car, or do you want to minimize the monthly payments even if you’re looking at a longer-term loan?

Zero percent interest can help lower your monthly payment, but often you’ll pay a little bit more for the car so the dealership can “make up for” the interest you aren’t paying on your loan. Plus, in many cases, you may need to have a very high credit score to qualify for a true 0% loan.

If you get a rebate, you can use that cash back for a significant down payment on the car, which could lower your monthly payment. You may even find some dealers that offer rebates in addition to a low APR.*

If you’re buying a car this spring, there are several ways you can save money. Here are a few:

Do some thinking. Make a list of things your car “must” have, things that would be “nice to” have, and things that really aren’t necessary. Obviously, you need a vehicle that is safe and runs well, but do you really need those heated imported leather seats and power everything?

Buy used if you can. Cars can lose a bit of value as soon as they’re driven off the lot. If you can find a used car that still has the features you want, you can save money. Often, dealers still give rebates for used cars.

Get preapproved for a loan. Your credit union can offer really great rates on auto loans, which means you can take the rebate on that new car and stretch your budget even more!

Now through March 31, CommonWealth One is offering our members up to 0.75% rate discount off our already low-rate loans during our March Mania Auto Sale Event!

With our special discounts, our auto loans offer:

• Rates as low as 1.74% APR*on New Cars
• Rates as low as 1.99% APR*on Used Cars
• Loan terms up to 84 months
• No Down Payment Required¹
• An easy application process
• Skip A Payment option twice a year

For more information about our March Mania Auto Sale Event visit our website. March Mania only lasts until March 31, so don't wait!