--- title: The Truth About 0% Auto Loans description: Buying a new car is exciting. All the way up until talking price with the dealer. This is where confusion sets in, and excitement quickly turns into frustration. ACCU is here to help with your car buying financial needs. image: https://blog.americaschristiancu.com/hubfs/Finance%20And%20Life/Truth-About-0-Auto-Loans-BLOG.jpg --- [![ACCU-logo-2020-1](https://blog.americaschristiancu.com/hs-fs/hubfs/ACCU-logo-2020-1.png?width=135&name=ACCU-logo-2020-1.png "ACCU-logo-2020-1")](https://www.americaschristiancu.com) - [Finance & Life](https://blog.americaschristiancu.com/finance-and-life) - [Ministry & Finance](https://blog.americaschristiancu.com/ministry-and-finance) - [Case Studies & Testimonials](https://blog.americaschristiancu.com/case-studies-and-testimonials) - [News & Press](https://blog.americaschristiancu.com/news-and-press) - [It's a Money Thing](https://blog.americaschristiancu.com/its-a-money-thing) ###### Posted by [ACCU Staff](https://blog.americaschristiancu.com/finance-and-life/author/accu-staff) ● 8/29/18 10:00 AM # The Truth About 0% Auto Loans Buying a new car is exciting. All the way up until talking price with the dealer. This is where confusion sets in, and excitement quickly turns into frustration. You think you’re getting a good deal, [but are you](https://americaschristiancu.com/calculators/)? One of the most misleading promotions you find at dealerships is the 0% APR offer. Paying no interest sounds great. You could save a bundle of money. So how can it not be the best decision? Let’s have a look comparing the 0% APR offer vs. a Cash Back Offer. ![Truth-About-0-Auto-Loans-BLOG](https://blog.americaschristiancu.com/hs-fs/hubfs/Finance%20And%20Life/Truth-About-0-Auto-Loans-BLOG.jpg?width=636&name=Truth-About-0-Auto-Loans-BLOG.jpg) **The 0% Interest Offer** Imagine you are purchasing a new vehicle that is **$25,000**. You choose the **0% APR** offer and finance the vehicle for **60 months** (5 Years). Your monthly payment would be **$416.67,** and in total, you’d spend **$25,000**. **Cash Back / Incentive Offer** Using the same example above, assume instead of the 0% APR offer, you choose a **$3,000 Cash Back / Incentive** offer from the dealership. This cash-back offer brings your vehicle cost down from **$25,000 to $22,000**. Assume you qualify for a **3.00% APR** auto loan rate, and you finance this for **60 months** (5 Years). Your monthly payment would be **$395.31**, a savings of **$21.36** each month. In total, over the life of the loan, you’d only spend **$23,718.67** ($22,000 purchase price + $1,718.67 in interest). In this example, you would actually save **$1,281.33** over the life of your loan. **Choosing the Right Option** The example above brings to light that the most obvious promotional choice is not always the best financial decision. One would assume paying no interest would be the smarter choice, but this does not hold true in our example. There are a few things you can do to help ensure you’re making a good financial decision. 1. **Obtain a Pre-Approval first.** A [pre-approval](https://americaschristiancu.com/personal/auto-loan/) means that you applied for a loan at your financial institution, had your finances reviewed, and were approved to borrow a specific amount. This gives you the upper hand in dealership negotiations as the dealer knows they cannot sell you a vehicle over your approved amount. 2. **Download a Loan Calculator app to your phone.** There are tons of free [loan calculator](https://americaschristiancu.com/calculators/) apps for both iPhones and Android phones. When presented promotional options by the dealership, plug in the numbers, and know immediately which is the best option. Don’t assume dealerships are always going to provide you with the best financial advice. 3. **When in doubt, ask for help.** If you’re at a dealership and you’re unsure which option is best for you, politely excuse yourself from the dealer finance office and contact us. Our Loan Officers are happy to help run numbers for you to ensure you’re getting the best deal and not falling into a promotional trap. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ [**We’re Here to Help!**](http://americaschristiancu.com) When you’re ready to begin looking for your next vehicle, stop by our branch or give us a call at 800-343-6328. We’re ready to help you get pre-approved, answer all your questions, and lock in a great, low rate. *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.* - Share - - - - - - [mailto:?body=https://blog.americaschristiancu.com/finance-and-life/the-truth-about-0-percent-loans](mailto:?body=https://blog.americaschristiancu.com/finance-and-life/the-truth-about-0-percent-loans) ### Subscribe Here! #### Related [Why Getting an Auto Loan Rate Before Visiting the Dealership Can Save You Money, Especially for First-Time Buyers](https://blog.americaschristiancu.com/finance-and-life/drive-with-confidence-why-an-auto-loan-from-a-credit-union-makes-sense) [NCUA & ASI Insurance Protection](https://blog.americaschristiancu.com/finance-and-life/ncua-asi-insurance-protection) [Get on Financial Track in the New Year](https://blog.americaschristiancu.com/finance-and-life/get-on-financial-track-in-the-new-year) #### Topics - [Financial Education (68)](https://blog.americaschristiancu.com/finance-and-life/tag/financial-education) - [Credit Union Basics (54)](https://blog.americaschristiancu.com/finance-and-life/tag/credit-union-basics) - [Finance Basics (53)](https://blog.americaschristiancu.com/finance-and-life/tag/finance-basics) - [Saving Strategies (17)](https://blog.americaschristiancu.com/finance-and-life/tag/saving-strategies) - [Tax Season (17)](https://blog.americaschristiancu.com/finance-and-life/tag/tax-season) - [Security & Fraud Prevention (15)](https://blog.americaschristiancu.com/finance-and-life/tag/security-fraud-prevention) - [Car & Vehicle (13)](https://blog.americaschristiancu.com/finance-and-life/tag/car-vehicle) - [Safety & Security (9)](https://blog.americaschristiancu.com/finance-and-life/tag/safety-security) - [Stronger Futures (7)](https://blog.americaschristiancu.com/finance-and-life/tag/stronger-futures) - [Banking Services (5)](https://blog.americaschristiancu.com/finance-and-life/tag/banking-services) - [Online Banking (5)](https://blog.americaschristiancu.com/finance-and-life/tag/online-banking) - [Electronic Banking (4)](https://blog.americaschristiancu.com/finance-and-life/tag/electronic-banking) - [Mobile Banking (4)](https://blog.americaschristiancu.com/finance-and-life/tag/mobile-banking) - [Savings Tips (4)](https://blog.americaschristiancu.com/finance-and-life/tag/savings-tips) - [Summertime (3)](https://blog.americaschristiancu.com/finance-and-life/tag/summertime) - [Tutorials (3)](https://blog.americaschristiancu.com/finance-and-life/tag/tutorials) - [Adoption & Fostering (2)](https://blog.americaschristiancu.com/finance-and-life/tag/adoption-fostering) - [Adoption Stories (2)](https://blog.americaschristiancu.com/finance-and-life/tag/adoption-stories) - [Credit Union vs. Bank (1)](https://blog.americaschristiancu.com/finance-and-life/tag/credit-union-vs-bank) - [Stronger Families (1)](https://blog.americaschristiancu.com/finance-and-life/tag/stronger-families) - [Surviving College (1)](https://blog.americaschristiancu.com/finance-and-life/tag/surviving-college) See All Topics