You’ve seen the ads touting 0% financing offers at the car dealership. They sound like a good deal, but are they?
Experts warn that when consumers get good financing--and many believe 0% is the best deal available-they don’t negotiate on price. As a result, car payments can be much higher than the budget can bear. Some 17% of consumers shell out between $500 and $700 a month for new cars, not counting insurance, gas, and maintenance costs. Another 43% pay $300 to $500 a month for their vehicles, and just 32% pay less than $300 a month.
According to Edmunds.com, the average new automobile retailed for more than $30,000 in 2004, a record high. And the average is increasing about $1,000 a year. Combine soaring car prices with lower down payments and dealership incentives to get consumers into the showroom, and car buyers could be walking into a trap.
According to a recent Cambridge Consumer Debt Index, 56% of Americans say their monthly car payments are putting a squeeze on their budgets, preventing them from making other big-ticket purchases. Some 17% of consumers consider their car payment a major burden, up from 11% in 2003.
Don’t let dealership incentives lure you into a trap that leaves you cash-strapped. Visit us today at www.pacadfcu.org or (800) 444-5504 to help you figure out the best financing for your car—and your cash flow.
