Car dealerships across the country are offering zero percent financing on vehicles for an extended period in response to the COVID-19 pandemic. The words “zero percent financing” sound great… but what do they really mean? Are there other frugal financing options that may be more beneficial for credit union members?
Think about the effort it takes to search for the right new car and to negotiate the lowest price. Unless you plan to pay cash in full, the third leg of the stool is finding the best possible financing. Because loans typically come in 12-month increments, we're talking about a decision that will affect your household budget a minimum of two years and probably more like five or six.
You’ve heard it said a car depreciates in value as you soon as you drive it off the lot. In fact, according to ConsumerReports, it’s the biggest cost of owning a car. But even if you don’t care about depreciation and plan on keeping your car until it’s good for nothing except scrap metal, you’ll still be facing the many costs of ownership.
When navigating automobile financing options, it's important to understand the angles and the entities that stand to profit from the transaction. We want to make sure you have negotiating power with your auto dealer--know what's available to you, and know how much you can spend before you go to buy.
Keep an eye out for factors in the market that may make vehicle trade-in values go up. For instance, natural disasters that affect manufacturing sometimes may increase car values. No matter what the situation, there are always a few things you can do to improve your trade-in value.
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