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Should I opt for car incentives and rebates or a lower interest rate?
"I'm shopping for a car and in quite a conundrum. My credit union has offered me a rate of 1.7% for 48 months. On the other hand, the dealer has offered $3,500 off the price of the car if I accept a 5.7% loan for 48 months. The amount I need to finance without the $3,500 off is $31,500.
Should I go for the incentives or the lower interest rate?"
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“In your situation, you’ll have to do some math to decide which is a better choice.
The lower interest rate gives you payments of $679 per month with $1,105 in total interest paid.
The rebate and incentives with the higher interest rate mean that your monthly payments are $654 per month, but you’d pay $3,379 in interest.
Therefore, you will still save money with the rebates and incentives, even with the higher interest rate. Just don’t forget that you’ll also need full coverage
car insurance
per the stipulations of your loan, which adds to the total monthly costs of your car.Just like you researched car loan rates, be sure to look around for the best insurance rates. Try using the free
Jerry
app to make comparison shopping easy. Jerry compares quotes from the top 50 providers and delivers the best deals to your phone in minutes.”View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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