compare our 2.99% APR to their 0% APR financing
The saying goes "If it seems to good to be true, it probably is". When you first hear the offer, it sounds great––you get a vehicle loan with no interest payments––what's not to like? Well, did you happen to notice all that fine print underneath the offer? Let's take a closer look.
- 0% financing is offered only to those who qualify. To qualify, you need to have nearly perfect credit, a high annual income and a nearly perfect employment history. Reality? Very few people qualify.
- 0% financing is offered in lieu of other rebates. To receive the 0% interest rate, you have to give up any other rebates available
- 0% financing is offered only on certain vehicles. 0% financing is usually restricted to vehicles that the dealers have on their lot, which may limit your choices. The vehicles they have may also have bells and whistles that you don't need or want, which can add thousands to the sticker price.
- 0% financing may require a larger down payment. If you're upside down (you owe more on the vehicle than it is worth) on your current vehicle, the dealer may not accept that as your down payment. So, you'll need to have the cash out of pocket for a down payment and figure out another way to sell your vehicle.
- 0% financing does not guarantee that you'll receive the best price on the vehicle. Some manufacturers increase the overall price to make up for not receiving any interest payments. Remember, the price of the vehicle is separate from the financing. Always be sure to negotiate your best deal.
Foothill Financing is Still Your Best Deal
Let's look at this example: You want to get a $20,000 vehicle. You have $2,000 as a down payment. You qualify for 0% financing and you qualify for a 2.99% loan from Foothill Federal Credit Union each for 36 months. Which is the better choice?
| Dealer with 0% Financing | Foothill | |
| Vehicle Price | $20,000 | $20,000 |
| Down Payment | $2,000 | $2,000 |
| APR | 0% | 2.99% |
| Loan Term | 36 Months | 36 Months |
| Manufacturer's Rebate | $0 | $2,500 |
| Loan Amount | $18,000 | $15,500 |
| Monthly Payment | $500 | $450 |
| Total Amount Paid | $18,000 | $16,225 |
| Total savings by going with Foothill | $1,775 | |
Financing only affects the interest you'll pay on your vehicle loan. Rebates reduce the total price of the vehicle. So, if you qualify and take the 0% loan, you'll pay more than if you took the 2.99% loan and $2,500 in rebates. Why? Because the total cost of the vehicle is more without the rebates. Bottom line: the total amount you pay for the vehicle is important, not the finance rate.
Before you head to the dealership:
1. Do your homework––research the car's value and see available rebates
2. Stop by Foothill to get pre-approved for your loan. Then you'll be ready to negotiate and walk out with the vehicle, rebates and loan payment you want.
