The Truth About Zero Percent Auto Financing

Is it Right for You?

Everyone has seen and heard the 0% auto financing ads on the radio, T.V. and newspapers but are they really a good deal? Zero percent financing is reserved for customers with an excellent credit rating. Each dealer has their own finance company and its own credit requirements.

Zero Percent Equals Higher Payments
Most car dealers require financing terms of three years or less with a zero percent offer. This means your monthly payment would be higher than if you took a low interest rate auto loan from your credit union.

No Cash Rebate
By taking the zero percent financing, you forgo any cash rebate from the auto manufacturer.

Read the Fine Print
It’s no mystery that auto dealers make no profit from zero percent financing so they are naturally going to make up for it somewhere else.

  • Dealers will increase extended service contracts or warranties.
  • Dealers may also charge an application fee or pre-payment penalty preventing you from paying your loan off early.
  • Fewer models to choose from, limiting your choices and the cars for sale often have a lower resale value.

If you need a strategy to use at the dealership or buying advice from the pros, contact our loan department at (925) 228-4545 and get you a great loan to match the car you want!



SWS Federal Credit Union
1700 Pacheco Blvd, Martinez, CA 94553

Routing & Transit Number: 321173218