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Is 0% Financing The Best Deal?

Is 0% Financing The Best Deal?

by | Jun 26, 2020 | EmberNote Blog | 0 comments

Financing options for the purchase of your new vehicle can be overwhelming. What interest rate do I qualify for? What terms are available for that interest rate? Can I afford that monthly payment? There are so many things to consider.

Auto dealers can sometimes offer 0% Financing. What is better than 0%, right? There are a few things to consider with 0%:

  • Most of these loans are short-term
  • This option is not always given on all car models, making you settle for less of a car than you wanted
  • You can have that 0% interest rate, but you must sacrifice the rebates
  • Your credit history matters. Only customers with the very best may qualify
  • Many times, 0% have hidden application or prepayment fees which further reduces savings

Let’s look at an example of an offer:

Purchase Price @ $23,000

  • Option 1 – financing with 0% interest:
    • $23,000 loan for 60 months @ 0% financing
    • Payment = $383.34/month
  • Option 2 – Credit union financing with a $2,000 rebate:
    • $21,000 loan (after $2,000 rebate) for 60 months at 2.50% APR
    • Payment = $372.71/month

You can see, your monthly payment with the credit union will be $10.63/month less than 0% financing.  This is a savings of $637.80 over the life of the loan.

If you are still not sure which is the right option for you, call us and we will gladly assist you in finding the right fit.

Credit Union Loans

Working with one of our loan officers can help make the car buying process go a little smoother. Start at the credit union website, check our rates and get pre-approved before you start shopping. Starting with a pre-approved loan puts you in control of the negotiation at the car dealership.

Our loan application and approval process are streamlined to be as fast as possible. Loan officers are available by phone, web, or email to get you pre-approved and ready to shop. Our contact info can be found here.

Like we mentioned, auto dealers may offer an enticing 0% financing offer, but there is usually a catch or two when you take that offer. Consider all your options before signing on the line.


Don’t forget to take privacy into account. When accepting that 0% financing offer, you are not only turning down the rebate offers, you’re giving out your personal information to a financial institution of the dealership’s choice. In most cases, the purchaser doesn’t even know what financial institution now has their personal information until weeks later when they receive their first bill in the mail. Privacy and security matter more than ever now.

In the end, no matter what financing option works best for you, remember your credit union staff is ready to help guide you through the process and help get you in your car.