Is 0% APR financing right for you?

Finance with Texans CU and beat the 0% APR financing myth

Many dealers are offering 0% APR financing and cash rebates to drive traffic into their dealerships. 0% APR sounds pretty good so why not take the dealer up on this offer, right? Not necessarily...
 

The fine print

  • Available to well-qualified buyers with near perfect credit, so many applicants are ineligible for this rate
  • Much shorter terms (24-36 months vs. the average 60 months), meaning a larger monthly payment
  • May apply to slower selling models only, giving you less selection to choose from
  • Cash rebates normally do not apply with 0% APR financing, forcing you to choose between the two offers
     

How you can come out on top

When the dealer offers a rebate as an alternative, you can often save more on your new car than if you chose 0% APR financing. Simply do the math to see your savings—when you apply the rebate as your down payment on the vehicle and include your low rate with Texans CU, you'll often come out ahead with this option. Consider an example:

  0% APR financing
with no rebate
2.50% APR Texans rate with $2,500 rebate
Sales Price  $20,000 $20,000
Rebate  $0 $2,500
Amount Financed 
$20,000
$17,500
     
Interest Rate  0% 2.5%
Term  60 months 60 months
Monthly Payment  $333.33 $310.58
     
Total Paid for Car  $20,000 $18,635

In this example, you're saving $1,365 over the life of the loan and saving $22.75 each month on your car payment—an annual savings of $273!

The next time you see 0% APR financing, be sure to read the fine print and do your homework to make sure you're getting the best deal. And be sure to get pre-approved with Texans CU to find out how much you could save if you take the rebate and finance with your credit union instead!

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