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Pros and cons of 0% vs incentive..... Posted by Mike Lynch [Email] ![]() ![]() In Reply to: Re: 0% AND cash back??, EW, Thu, 26 Jun 2003 08:51:51 Members do not see ads below this line. - Help Keep This Site Online - Signup |
Finance a balance of $25,000 for 5 years/60 mos at 5% and the arithmetic says the finance charge would be about equal to a $2,500 incentive. $25,000 at 0% is $416 x 60 mos. Take away a $2,500 incentive and finance $22,500 at 5%ish and the payment for 60 mos is $421ish.
Some would say take the $2,500 now at comparable payments. That way if you do pay off or trade early you'll get an interest refund. If you finance for 5 years at 0% you'll never be eligible for an interest refund. If you paid a $22,500 5 year loan off after only one year you'd save about 70% of the $2,500 anticipated finance charge, or about $1,750ish, and you'd have already saved the $2,500 incentive.
So if you're are putting alot down, or the car has a much bigger incentive, it's good to have it calculated both ways.
posted by 207.158.49...
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