Auto Loan: Options or Rebates?

Is the auto loan ready yet? That is the question you probably want to ask the company that is giving you money for your new car. It can be a hassle to get the best auto loan and do so in a reasonable amount of time. A major part of finding a quality auto loan is evaluating options and rebates. Rebates may seem great, but do you really want one over other options?

Don’t Let Them Confuse You

There are plenty of automobile companies that like to tell you things that sound really great. But it is one thing to hear something; it is another thing for the promise to actually work out for you. If a car company, for instance, offers to give you a deal where you pay nothing for one year, you should think twice before accepting. Do you really think they will let you get away with one free year? Odds are, the company will make up for the lost profits somehow, leaving you to foot the bill either way. They may charge you more interest or higher payments, so watch out for these back-end charges. Do not just take your one free year and turn away blindly.

Rebates: How Helpful Are They?

“If you buy now, you will get $1,000 back instantly!” We have all heard that, and it sounds great. But stop and take a look. You will probably end up paying a higher interest rate–maybe up to 5% more. Over time, this all adds up. So instead of looking at the present, look to the future. Will you save more in the long run by taking the lower interest rate and forgoing the rebate?

Five percent seems like a small number, but remember you are not paying over a small amount of time. Your payments will be stretched out over a number of years. In some cases, you can save up to $500 more than with the instant rebate. Not accepting that instant rebate looks a lot better now, doesn’t it? If you take the time to weigh your options, you can find which incentive benefits you the most in the long term.

Getting Your Loan

Your loan is very important. If you do not select your loan carefully, you will be stuck with your mistake for years. You need to make the right decision the first time. Getting a second loan to correct a mistake is a costly and time-consuming option, so take your time in choosing your auto loan.