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is it better to get a loan with APR of 3.9 percent over 60 months than a loan with APR of 0 for a period of 72 months?

i am going to finance a car. I was offered a 0 percent APR with 2000.00 downpayment for a period of 72 months. The other option as a 3.9 percent APR with 2000.00 down plus 1000.00 Rebate for a period of 60 months. Which is the better deal? I will most likely trade the vehicle in after 48 months anyway, but mathematically speaking does it calculate out to be less money out of pocket for the 0 APR for 72months with 2000.00 down and no rebate. or 3.9 APR for 60 months. with 2000.00 down and 1000.00 rebate. sounds like a dumb question but am trying to convince my mother that 0 percent is better... just need help explaining the math to her. thank you.

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0 Views: 1028 Answers: 4 Posted: 12 years ago

Tags: financing a automobile

4 Answers

dwayne1716

Karma: 36951

ON 20000$ YOU WILL PAY 2045 $ OVER THE LIFE OF THE LOAN THESE TYPE OF LOANS OFTEN HAVE EARLY PAY OFF PENNALTIES. AS I SAID EARLIER YOU CANT BEAT O%

12 years ago. Rating: 0
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dwayne1716

Karma: 36951

YOU CANT BEAT 0 FOR 72

12 years ago. Rating: 0
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dottiemae

that is what I thought but mathematically does it calculate to being less money out of pocket for 0, even if they give me a 1000.00 rebate on the 3.9 APR for 60 months.

commented 12 years ago

dottiemae

thank you. I will most likely be trading the vehichle in after 4 years any way. but i wasnt sure mathematically if it would be smarter to do 0 for a longer period or 3.9percent and a thousand dollars back for a shorter period.

commented 12 years ago

dwayne1716

WHAT IS THE AMOUNT FINANCED

commented 12 years ago

schubee

Karma: 28785

Depends on your financial situation and how long you will drive. But you never want to pay extra(interest) whatsoever.

12 years ago. Rating: 0
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gary

Karma: 11008

And why are you planing to trade it in after 4 yrs? That's stupid. If a car takes you from place "A" to place "B" without a problem you should drive it till it croaks. My last car I drove 13 yrs till I unfortunately crashed it and still got good mileage and good service with little expense. Wake UP guy.