Dealer Financing Facts

The REAL Story Behind Dealer Financing

You’ve heard it before – ZERO Down!   ZERO Interest!   ZERO Payments for 6 months! There is even a dealership advertising a NEGATIVE interest rate! Seems too good to be true, doesn’t it? Well, IT IS!!

Let’s just take a look at this too-good-to-pass-up deal. Triple Zero ads are promoted heavily so you should know the facts – starting with the fact that these promotions can be some of the most deceptive and unfair to the consumer. By using word games, and by deliberately obscuring details, the promotions hurt unwary consumers in the wallet. READ THE VERY FINE PRINT and you will see these things:

  1. Zero down payment doesn’t mean no money – Every buyer still has to pay tax, license, registration and the other dealer fees, which can run over a thousand dollars. That’s a down payment in our book!
  1. Zero Payments for Six Months! Is the dealer or their financing company being kind and making your first six payments for you? Of course not! They are doing one of two things: either adding the six payments to the end of your contract, or, even worse, financing those first six payments. Either way, you pay MORE interest. Interest doesn’t go away. You’ll pay it sooner or later.
  1. Zero percent!   In addition, you might have seen that zero percent is legal bait and switch. According to CNW Marketing Research, barely 9 out of 100 people drawn to a dealership because of zero percent financing actually get it. To make matters worse, the research company found that consumers don’t negotiate on the actual price of the car when they go to dealerships for zero percent. They don’t realize that the price of the car and the cost of financing are TWO SEPARATE ISSUES. Those consumers pay thousands more than they need to pay.

Can you do better than Zero percent?

If a rebate is offered as an alternative to 0%, the answer is often YES! To do so, you need to apply the rebate as a down payment on the vehicle. Look at the two examples below – one with a $2000 rebate and one with a $3000 rebate. At CUPFCU’s current rate for members with the best credit, you CAN do better!

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* APR=Annual Percentage Rate. CUP FCU loan rates are based on your personal credit history and are subject to change.

Go to the Dealership armed with this information. Tell them up front you want the REBATE instead of the special financing. Have them apply the rebate to the vehicle purchase, and then get your loan from US!!