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Rebates vs. 0% Financing

Looking for the best rate to finance the purchase of your vehicle can seem like a minefield of choices. How does rate factor into a monthly payment that is both affordable and reasonable?

Let's look at what is often the most sought after rate: 0% Financing. Who can beat zero? One would think 0% is the best available rate and question why would anyone want to pay anything above a rate of zero?

Here are some important factors to strongly consider:

  • 0% is only offered to consumers with the very best credit history
  • 0% forces you to choose between the rate or the rebate, you cannot have both
  • 0% is generally used on short-term loans such as 36 months
  • 0% is often used for slow selling models that have trouble selling or are in stock
  • 0% may have hidden application or prepayment fees which further reduces savings

You negotiate a purchase price with a local dealership for $23,000 with an offer of 0% financing for 60 months or a $2,000 rebate. These are both attractive offers but you have no idea which one offers the greatest benefit for you. We can show you how to break these options down:

Purchase Price @ $23,000

  • Option 1 - financing with 0% interest:
    • $23,000 loan for 60 months @ 0% financing
    • Payment = $383/month
  • Option 2 - Credit union financing with a $2,000 rebate:
    • $21,000 loan (after $2,000 rebate) for 60 months at 1.99% (sample credit union rate)
    • Payment = $368 per month

Using this example, it is quite clear the rebate option along with credit union financing will help you save more money. In this example, you will save $15 per month and when you add this up over the life of the loan (60 months), you will save $900.

If you are still not sure which is the right option for you, please contact us and we will gladly assist you in finding the right fit.

The Right Loan

Doing business with your credit union puts you in the driver’s seat. It’s a different experience working with a credit union than a large bank. For starters, the credit union is a not-for-profit organization established by members for members. That means you! Once you qualify for a loan with your credit union, you’re a member of a very special financial institution.

Here are some of the perks of getting a loan with a credit union:

Auto Loans

Credit unions in general offer better auto loan rates than major banks. It is always a good idea to check with your credit union first to obtain a loan before shopping for a new or pre-owned vehicle. Often you will find better rates and a more personalized approach.

Lower Rates

Correct, rates at credit unions are generally lower. The reason, credit unions pass savings from their not-for-profit status throughout their product lines. As an example, credit unions offer members higher rates on savings accounts and lower rates on loans and credit cards. They are not looking to make a profit off their members.

Loan Approval

Credit unions exist for their members. They are more likely to understand and listen to your circumstances when applying for a loan; sometimes adjusting terms of loans accordingly. While the loan approval process is similar, a credit union is much more approachable and willing to work with you. Credit unions strive to provide a personalized approach that values the member and the member's financial situation.

Customer Service

Members report high satisfaction rates when conducting business with credit unions. Did you know the mission of a credit union is to provide members with affordable financial services because their goal is not to profit from a member?


If you have ever been turned down by a major bank, you will be surprised to learn how flexible and happy your credit union is to do business with you. If you are self-employed, it can be tough to get financing or approval for anything from a major bank. Working with a credit union will maximize your income by saving you more while increasing your savings!

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