< 1 minute read|Published by FAIRWINDS

Should I take the zero-percent financing that dealers offer?

When it comes to zero-percent financing, is zero really your hero? There are many factors to consider before driving off with a zero-percent auto loan.

Salesman showing a car to a customer in a car dealership.

When it comes to zero-percent financing, is zero really your hero? While you may be eager to accept this popular offer from dealers, there are many factors to consider before driving off with a zero-percent auto loan.

What is zero-percent financing?

The financer is lending money to the buyer without charging any interest over the life of the loan. It’s common for dealerships to offer incentives like zero-percent financing or a rebate, especially for slower-selling models, or to make room for newer models.

Which offer should I choose: zero percent or a rebate?

Combining a shorter term, like 36 months, a low-interest rate, and a rebate can potentially fuel your savings more than a zero-percent offer.

New Auto Loan: $30,000

Term

36-months

60-months

Sales Price

$30,000

$30,000

Rebate

$-2,500

$0.00

Net Price of Car

$27,500

$30,000

Interest (%)

1.90%

0%

Interest ($)

$900

$0

Loan Amount + Interest Repaid

$28,400

$30,000

Savings

$1,600

$0

Before you head over to your nearest car dealership or check out their online inventory, get a precise picture of which option could save you the most money with our Rate vs. Rebate Calculator. Another recommendation? Make sure you’ve determined how much you want to contribute for a down payment, and start building a savings plan to decrease the amount you finance.