Auto Loan Dealership Financing Beware

• Sometimes getting a better interest rate on a loan through the car dealership may or may not be the best deal. For one reason, the dealer may not lower the sticker price of the vehicle as much. With a pre-approved loan in your hand, you are negotiating the savings on the vehicle only....without a pre-approved loan, you are negotiating the vehicle price plus negotiating the interest rate for the loan, which won't do you much good.
  
  
• How much do you think those car dealers can do for you? If they are offering 0% financing, or 2000 dollar cash back rebate, it will be your choice which one you want, because you can't have both. With a pre-approved loan, you can take the 2000 dollar cash back rebate and be done with it. Or you can take the 0% financing (if you qualify) and not need the pre-approved loan you were approved from your lender, as previously mentioned on Car Loan page.
  
  
• If you think about it and add up the different of 0% financing compared to taking the 2000 dollar cash back rebate, which is the better deal in the long run for you? If you are good at mathamatics, you can figure it out. If not, keep reading.
  
  

• What you should know about car dealership 0% financing:
  
  
  • 1) With all the restrictions, you may not even qualify for the 0% financing. 0% financing are limited to those with pristine credit. The definition of pristine credit varies among manufacturers and most are not willing to disclose their definitions of qualification. If you have bad credit, forget it.
    
    
  • 2) Normally, fewer than 10 in 100 people who want this offer get it, because they don't qualify, according to a survey by the Consumer Task Force for Automotive Issues.
    
    
  • 3) With 0% financing, you are unlikely to be able to negotiate the vehicle price, so you will end up paying more. These options are almost always available only on slower selling models, which often have lower resale values.
    
    
  • 4) Dealer's offer 0% financing or the cash back rebate. You can't have both.
    
    
  • 5) Those that qualify will be limited to short term loans, 24 or 36 months, making payments extremely high that most people can't afford the monthly payment. Also may require a larger down payment. If you have the financial freedom, go with what saves you most overall. But remember, if you are giving up the rebate, the price of the car will be more to finance, if the rebate is 2000 dollars, you just paid 2000 dollars interest up front.
    
    
  • 6) Those who do not qualify for the 0% financing get moved up to a higher interest rate.
    
    

• If you are still confused, to help you determine if the rebate or the 0% financing is the better deal, ask the car dealership for a copy of what the finance contract will look like, but don't you sign it. Tell the dealership you'll compare it to other lenders; banks, credit unions, online sources. If the dealer has nothing to hide, he will glady do this for you. If the dealer refuses your request, there's your answer. But wouldn't you think they would be happy to give you a copy if they were competitive? If the car dealership does give you a copy, always check it out with another lender to see if the financing can be beat. Never take a car dealers word for granted. See Loan Calculator Examples to compare.
  
  

• 1) Your local credit union
  
  
• 2) Banks
  
  
• 3) The internet
  
  
  

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