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Would you recommend 0% financing when buying a new car or choosing the rebate that are offered?

Answers from the Automotive Experts

Jenny Trostel, Partner at Anderson of Hunt Valley It depends on your credit rating and what the amount of the rebate is. Ask your salesperson to calculate the loan both ways, then you can decide what works best for you. With interest rates dropping, sometimes it makes more sense to take the rebate. If you have a good FICO, 720 or above, you can get a really good rate on a loan. If the rebate is greater than the interest that you will pay during the life of the loan, then go with the rebate. If not, go with 0%. Good Luck!

Susan Seboda, President at Congressional Motors Hi Lauri, It depends on the amount of the rebate, what the financing rate would be if you went with the rebate and your personal financial situation. I would recommend you ask the dealer to calculate your monthly payment both ways, ie. 1) at 0% financing without the rebate, 2)with the rebate included in the deal as a downpayment and at the going finance rate. And ask if the rebate is customer cash or dealer cash. If it is customer cash you may actually have a third option - calculate your monthly payments assuming the customer cash is not a down payment but a payment to you. Of course your monthly payments will be higher under this scenario. Also please be aware that your credit rating affects what financing rate you will be able to get. Review each option and then see which suits your financial situation the best. For example. if you are on a tight budget, you will want to pursue the lowest monthly payment. Good luck and have fun shopping for your new car! Thanks, Sue Seboda

Jessie L Thatcher, F&I and Sales Specialist at Reynolds and Reynolds Company  (Retired) That would depend on what interest rate you can get from your financial institution. Also know that to get the 0% rate you must have excellent credit. At least a 720 Score on your credit report and also you must meet the other rating requirements: ie: debt to income, time at residence, time on the job, etc. The percentage of people who qualify is very small. If you do qualify.... Take your payments at the other interest rate and multiply by the number of months to get the actual money you will pay out during the term of the loan, compare that to the 0 rate, add the rebate and after comparing the two you will know which is best for you.

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