0% Financing - Know the Risks

You’ve seen the ads touting 0% financing offers at the car dealership. They sound like a good deal, but are they?

Experts warn that when consumers get good financing--and many believe 0% is the best deal available--they don’t negotiate on price. As a result, car payments can be much higher than the budget can bear. Some 17% of consumers shell out between $500 and $700 a month for new cars, not counting insurance, gas, and maintenance costs. Another 43% pay $300 to $500 a month for their vehicles, and just 32% pay less than $300 a month. Combine soaring car prices with lower down payments and dealership incentives to get consumers into the showroom, and car buyers could be walking into a trap.

According to a recent Cambridge Consumer Debt Index, 56% of Americans say their monthly car payments are putting a squeeze on their budgets, preventing them from making other big-ticket purchases. Some 17% of consumers consider their car payment a major burden, up from 11% in 2005.

Don’t let dealership incentives lure you into a trap that leaves you cash-strapped. Visit Heritage Credit Union today to help you figure out the best financing for your car—and your cash flow. We can help you with refinancing your auto loan to lower your monthly payment and save money!