Question by : 0% APR or ,000 cash back? Buying a new car and I would like to know exactly how much a 0% APR is worth to compare against an optional rebate. The deal is you choose 0% APR for 60 months or you take $ 1,000 cash back. Let's say I can get an alternative loan at 4% APR, and the car costs $ 25,000 even. What is the present value of the 0% offer? *Note - I found a tool that gave me the amortization schedule for a 4% APR loan and the total interest came to about $ 2,600. But that $ 2,600 is spread over 5 years. So I need to know the present value of $ 2,600 spread over 5 years according to the amortization schedule of a 4% loan. As I said in the question, I already looked at the amortization table. I can see that at 4% I will pay $ 2,624.78 over 5 years. And I can see for myself how it breaks down by month. What I want to know is: what is the present value of that? Best answer for 0% APR or ,000 cash back?:
Answer by Doctor Deth
you will save a lot more than $ 1000 over 5yrs with zero percent financing I don't know the exact calc, but it's a lot more than $ 1000 PV just the first year alone at 4% will be almost $ 1000 take the 0% you 'll probably be ahead of the game by your 15th payment
Answer by timothy p
4% is a great rate. Even at that low rate you would save the 1k in interest charges by going with the 0% in just a little over a year. Look at the amortization schedule to see how this works out.
Answer by Cash
I would prefer to go with 0% APR as it's yielding more and it also keeps the monthly payments less.
Answer by Judy
Go with 4%. Someday you might want to pay that loan off early. And what if you wreck the car - the insurance will pay off your loan - lost money. /
When looking at the way everyone seems to use credit cards frequently these days you will find out that many do use them, and some really want to keep from going more and more in debt. With the way the economy is up and down these days and more things that we need and use everyday like gas for our cars and food for us to eat the prices have tripled. Even electricity and gas to heat our homes costs more than it did last year. With prices on everything going up we have to find a way to get the things we need without spending more money than we have to when we need it now, and do not have any more money for that week.
Banks and finance companies offer 0 APR credit cards for people who apply and are approved for them, just so they too can benefit on new customers and everyone gets credit facilities. With this in mind there are suppliers out there who have such products for both personal and business use.
These cards have the no interest for a few months to a year, or longer. With these options available and the other features of the card, you are sure to find one that you will like and be able to get for your own use.What the wonderful thing is about this type of plastic, even if the zero interest rate is only for a short time, you can use these in a pinch, be able to pay off the balance quickly, and not have to worry about any interest or finance charges if you get it paid off right away. Most are not for business use, and even the companies that have thought about this will have special offers for 0 APR credit cards. Some of these cards are a year, or more, or indefinitely. Of course, the companies might be able to change these terms at any time with the agreement.
All 0 APR credit cards mean that you can transfer balances from other accounts and save your money on the interest you would pay on these.If you have any of the offered 0 APR credit cards you are sure at some point have to use it, and sometimes even using it for your day to day purchases like the gas you had to fill up on Monday for your car, or the groceries you bought last night for the week. This does help you keep track of your purchases that you might otherwise forget that you spent for the week for that budget category.
Whatever card you choose, make sure you get it from a source which also allows you to prolong your zero interest period by allowing credit card balance transfers on an automated or at least semi-automated basis.
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