As a loan officer, I often hear from our members that the dealership offered 0% financing on their new vehicle loan. Well, 0% sounds pretty darn good, and it is definitely a rate Dynamic FCU cannot beat.
However, with vehicle rates so low, it may be worth doing some calculations to determine if it is 0% is really the best option. For example, a 2016 vehicle priced at $30,000 financed at 0% for 72 months would be an approximate monthly payment of $470.00 a month.
Now compare this option, to a dealer incentive/rebate of $3,000 off the purchase price. The purchase price is now $27,000 and Dynamic FCU is able to finance this amount for 72 months at an interest of 3%. The monthly payment would be approximately $411 a month, and the total interest paid on the loan the 72 month term is around $2563.
In my opinion, the second option sounds better to me. I start out owing less on the car and I get a lower monthly payment. Even after I pay the interest due on the loan I still end of $437 ahead when compared to the 0% financing.