Mortgage News & Blog | Pragmatic Mortgage Lending

0 Financing | Is it worth it? | Zero Percent Loans

A 0 Financing loan can be a great way to #finance your next #vehicle. But you need to make sure you are getting the best deal at the dealership and #EDUCATE yourself on how to not get wrapped up in just the 0 Financing or Zero Percent Loan offering.

Sometimes a #cardealership will offer a further incentive as a cash discount off the vehicle isf you pay #cash OR finance at a higher #rate. So when should you take the 0 percent financing loan option?

DO THE MATH! After you finish paying for the vehicle including the interest rate spread over the term of the loan: Is it Cheaper or More money to take the 0 financing loan? This depends how much discount the dealership provides off of the car if you do not take the 0 financing loan.
How long do you plan to keep the vehicle? 2 years?: Likely you should take the cash discount! If you don’t plan to leverage the 0 financing loan for the long term it may not be worth it. AND DON’T #FOOL YOURSELF, the average person keeps a vehicle for 3.6 years… So don’t get caught up in feeling confident you will “keep this car until you die”.
Don’t Buy #Emotionally ! A reputable car dealership will provide you full disclosure of the vehicle price PLUS finance and lease options. DO NOT get caught up in the monthly payment… just because it is 0 financing loan and $290 a month for the next 120 months (ya…. that’s 10 years) does not mean it’s a #gooddeal. Dealerships like @kelownamercedesbenz and @sentesautogroup have a #transparent sales process that educates you on your options.
Finally, if you hate numbers: Seek #advice from a finance professional. A #mortgagebroker is a good source to rely on to crunch the numbers in the #interestrategame .