REBATES VS ZERO PERCENT

Your Credit Union believes you want to understand the truth about zero percent financing. Here are the answers, and we'll tell you the truth.

• 0 down payment? Sure, it's quite common if you have a strong enough credit history.
  
• 0% financing is offered by manufacturer-owned finance companies. If the car dealer makes enough profit on the sale to cover the costs of financing, they can easily afford to charge 0% interest.
  
• 0 payments for six months? A year? Sure, as long as you don't mind owing a lot more on a car than it's worth! This is called being "upside down" and it's not a good place to be. If your vehicle were to be totalled in an accident (or stolen) your insurance company will only pay fair market value. And that is going to be a lot less than what you owe on the loan! So where does that leave you? Owing your financial institution the difference!

But wait, these same car makers offer large cash-back incentives too. What's the catch? Rarely will you find a quality car being sold by the maker, with a heavily discounted price and 0% financing. Remember, any cash discount offered is only excess profit the car maker is willing to forego to sell the car. Look at their financial statements—they're not losing money.

So there's a catch? Usually. The dealer-offered 0% interest is reserved for what they call "tier 1" borrowers— those with near perfect credit only. The cash rebates are available to everyone. The same usually applies to low payment leases… or they require large cash down payments and excellent credit.

As you can see, what might seem a good deal at first really isn't! Your best move? Come see an AMPLIFY Account Management Professional (AMP) and let us help you do the math.

And honestly, if you bring in a deal that's better than financing at AMPLIFY, we'll tell you straight up. And that's the truth.