Bad Credit Auto Loans – Rebate or Zero Percent?

When lenders experience a dip in their clients, they start advertising various offers which allow them to attract more probable borrowers. There are several offers but the ones most advertised are zero percent financing and rebates on down payments or loans. These offers are also available in case of bad credit auto loans and if an individual witnesses such an opportunity, then it is best to view the offer. The different characteristics of both the offers are mentioned in the following lines:

Zero Financing: one might wonder as to how do the lender or dealer earns his/her profit if the finances are being given at zero percent interest. However, there are several restrictions in the financing given at zero percent. The lender/dealer might restrict the options of cars that the borrower can buy. There are instances when they increase the price of the car to ensure that profits are still made. If the borrower likes the car which the dealership is providing, then he/she should certainly go for the offer.

Rebate: rebates are one of the best offers that one can get on bad credit auto loans. In rebates, the dealer reduces the amount that the applicant has to pay as down payment. If the borrower sees that the interest rate is charged high and a rebate is given, then it is best to avoid the offer as borrower ends up paying the same price. However, if the rebate cancels out the interest charged or reduces it to a large extent, then this offer should be considered.

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