0% APR or cash back in car purchase?
Which is better in buying a car, 0% APR or cash back?
Example:
Ford F-150 Supercab & Supercrew
0% APR Ford Credit Financing for 60 months - OR up to $4,500 cash back
$2,500 Customer Cash (PGM #11814) + $1,000 Promotional Bonus Cash (PGM #11818) + $1,000 Ford Credit Bonus Cash (PGM #11816). Ford Credit Bonus Cash requires Ford Credit financing. Not all buyers will qualify for Ford Credit financing. 0% APR financing for 60 months at $16.67 per month per $1,000 financed regardless of down payment (PGM #20250). Excludes F-150 Raptor. Residency restrictions apply. Take new retail delivery from dealer stock by 9/7/2010. See dealer for qualifications and complete details.
Take the cash back.
For one thing you might not keep the truck 5 years.
When you calculate a car loan of 20000 for 5 years at 5 percent the payment comes to about $377 per month.
With your example at zero percent it is around $323 per month.
This means the zero percent saves you fifty bucks a month or $600 per year. In five years this would be $3000.
This is $1500 less than the cash back.
Read the fine print to make sure you will really get all the cash back and also whether you qualify for the zero percent loan.
