Car Loans - 0% Financing or Cash Rebates?

[ckelly71]

For those of you debating 0% financing versus a cash incentive, please consider the following:

If you choose the 0% financing and decide to pay your car off early, you're losing out big time. The 0% financing is only efficient if you keep the vehicle for a long time. Typically, your "break-even" point on a 5 year loan happens around 48 months (sometimes sooner if typical rates are really high). In other words, if there is any chance you'll be trading in your car, selling it or just paying it off before that 4 year mark, take the rebate instead.

Here's another wrench to throw into the mix -- what if the vehicle is totaled on insurance??? The insurance companies aren't going to look at the rebates that you gave up. They're going to pay the market value of the car at the time of the total loss and that's it (unless you have gap coverage but that is another issue).

Long story short, there are tons of advantages to taking the rebates. Avoid the rose-colored glasses when you see that special financing and proceed with caution. More often than you might imagine, the rebate is the better option.

- Chad

[GREENBACK]

I've always thought the 0% deals were for suckers. Banks and car dealers have ripping off consumers down to a science! You never come out with the better end of the deal when you deal with a car dealership. Rebates seem to be a better deal but letting someone else buy it( and the immediate depreciation) first and sell it in a year or 4 is a far better deal for the next buyer.