We've all heard about zero percent financing from the dealer. The automobile manufacturers’ rates seem great. What could be wrong with them? Plenty, if you take a look at the fine print.
Consider the total cost of the loan too. Will you be charged an application fee? Is there a prepayment penalty? Would you be required to pay front-loaded interest, that is, pay more of the interest earlier in the loan? You may carry a larger principal balance longer, meaning at some point the value of the car could be less than the balance of the loan.
Your best deal could come from skipping the low dealer rate, taking the rebate the dealer is offering, and financing your vehicle through your credit union. Why?
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