Financial Tips to Do Better

I’ve been shopping for a new car, something gas-efficient, fun to drive, and safe. It's easy to feel out of your depth, to be tempted by salesmen pushing deals or promises of low interest.

Who doesn’t love low interest?

You see that banner advertising 0% APR twirling in the wind, and it seems impossible to ignore. A new car while only paying the minimum payment AND accruing zero interest? Who wouldn’t want to sign on the dotted line?

Well, probably you, and you don’t know it yet.

It’s a fantastic offer on the surface, but as soon as you dive deeper and pick apart the terms and conditions, the bargain starts to sour. No dealership is going to let you drive a new car off the lot for free; they’re a business looking to make money.

Still tempted? Let's break down how these offers really work, and what to watch out for before you sign yourself into debt.

Want the rebate?

When considering 0% APR promotions, it's important to recognize that these offers often replace other incentives, like cash rebates, which could save you more in the long run. For instance, if you're buying a car priced at $35,000, you might face the choice between a low-interest rate like 0.99% or a cash rebate. However, many dealers now provide these deals as singular promotions without additional rebates.

It's crucial to evaluate whether the upfront savings of a rebate, when available, outweigh the allure of low interest. Often, these deals will be restricted to a specific model vehicle the dealership wants to get rid of, providing you even less flexibility.

You can’t fight math; you can try, but you’re going to lose. At the end of the day, by choosing the rebate option, you’ll spend less money overall on your vehicle. It’s easy to get tricked by the tantalizing promise of 0%, but if you dig deeper, it doesn’t quite make sense.  

Uh, What’s Your Credit?

You might not be a qualified buyer in the dealership's eyes. Their job is to get you in the door, and the 0% offer helps them do that, but it doesn’t automatically mean you qualify. Deals of this nature typically require a credit score of around 740, minimal debt, and a strong payment history.

Even if you qualify, the dealership may still require a larger down payment to secure the offer. If your score is slightly lower, you might be offered a higher “promotional” rate instead often without realizing how much that difference will add up over time.

Want to raise your credit score so you have more flexible options? Easy Ways to Avoid Bumps in Your Credit Journey.

Pay if Off Fast

With recent trends, dealerships are offering low financing rates over extended terms, such as 60 to 72 months, rather than the shorter terms traditionally associated with 0% deals. For example, financing a $35,000 vehicle might come with a 5% rate for 72 months, resulting in monthly payments that are potentially easier to manage. Atlantic offers terms up to 96 months, allowing you to find the best loan that fits your monthly budget.

Exploring these updated approaches helps ensure that the financing option truly aligns with your financial situation and future plans. We want to hear your story and help you get the car that improves your life. If you’re in the market for a new vehicle, please reach out.

WATCH OUT FOR ADD-ONS

Listen, loan providers rarely lose money on 0% loans. Once you agree to finance through them, they often make up the difference through optional add-ons, such as extended warranties, service plans, or dent & scratch protection.

These 'extras' add up quickly. Before you know it, your loan is thousands of dollars higher because you were so focused on the "no interest" part of the deal.

If you already have credit union financing secured through Atlantic, you can confidently decline these extras or review them with your loan officer to see if there’s a more affordable option.

Atlantic offers extra protection that can help keep your bill lower, like Guaranteed Auto Protection (GAP) insurance. GAP will cover the difference between the cash value of your vehicle and the outstanding loan balance should you lose it in an accident. Remember, your car loses value the minute you drive it off the lot.

Are you ready for unexpected repairs? You should consider a vehicle service contract. Atlantic’s CU Certified protection offers more affordable options, covers 18,000+ parts, flexible mechanic choices, and can even boost your resale value.

Bring a Blank Check

Getting pre-approved through Atlantic’s Blank Check Approval Program before you visit a dealership is one of the smartest ways to protect your finances and simplify the car-buying process.*

A pre-approval gives you:

• Clarity: You’ll know exactly how much you can borrow and what your monthly payment will be.
• Confidence: You can focus on negotiating the vehicle’s price instead of playing financing games.
• Control: You’ll already know your rate, loan term, and what you can afford before you even step into the showroom.

Together, these benefits take the stress out of the car-buying process and help you make decisions based on facts - not pressure.

TLDR:

When shopping for a new car, 0% APR deals can be tempting, but they often come with hidden costs, like forfeiting rebates or requiring high credit scores and large down payments. These offers might lead to higher monthly payments beyond your budget. Instead, consider pre-approval programs like Atlantic's Blank Check Approval to clearly understand your borrowing capacity, secure your rate upfront, and focus on negotiating the car's price rather than navigating potentially misleading financing terms.

We’re Here to Help!

A 0% APR deal might sound like the best way to save, but once you look closer, it’s not always the most affordable option. Find the best auto loan for your finances!

If you want to learn more about auto loan pre-approvals or need help reviewing another lenders’ offer, we’re ready to help. Please stop by any of our convenient branch locations or call 800-834-0432 to speak with a member of our lending team today.

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The Atlantic Financial Tips to Do Better strives to deliver informative, relevant, and sometimes fun financial information. If you enjoyed this article, please forward it to a friend.

Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.

*Subject to credit approval. The blank check is valid for 60 days after issue date. Must be a member of Atlantic Federal Credit Union.