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Which is better? Zero-interest loans or cash back incentives?

When trying to decide whether to take a cash-back incentive or a zero-percent loan, Acura Tucson customers should examine their options by calculating the overall costs of either choice. Generally the amount of money being saved will be very similar but with these helpful tips consumers can gauge which option is best for their personal financial situation.

A long-term calculation is needed to fully determine the long term benefits of a car loan option. By using an auto loan calculator anyone can determine the overall loan payback cost, including your tax, fees and interest rate. By going to a lender of your choice and getting a pre-approval interest rate, this will be vital in the calculations of the terms of your loan.

There are also approval considerations. Zero-percent financing is usually only offered to buyers with good to excellent credit. Poor-credit customers may not be able to receive a zero-percent offer. Banks also have the ability to determine loan value based upon a borrower’s debt-to-income ratio, which means a customer can be declined the desired loan amount, despite having good credit. It’s vital to ensure that your total monthly debts are accessible on a credit report and proof of income is required.

If ultimately the consumer agrees to take the cash rebate or zero-percent financing, the dealer makes full profit on your vehicles sale. The manufacturer, which offers incentive options, will reimburse the dealer for either option. To save more money a buyer should negotiate your new car pricing in the same way someone would with a used car. It is reasonable to expect to save about $20 per month for every $1000 you negotiate off the price of the car.

Finally, a budget must be determined. By using an auto loan calculator, a buyer should determine if a zero-percent option suits your personal budget. Many manufacturers consistently offer zero-percent interest rates on shorter term loans, like a 36-month loan. Rebates, the alternative choice, are more likely offered no matter how long the terms are on the loan. Without a hefty down payment, you may not even want the zero-percent option because of the high payment. Consider all of these factors and how they affect the personal budget determined.

By taking all these factors into consideration any buyer should be well on their way to determining if zero-percent interest rates or a cash-back incentive suits them better. Right now at Chapman Acura, both lease and financing specials are available.

 

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