Date : 06/17/2004

Ads promoting auto dealership sales incentives such as 0% financing, low-rate financing or rebates can be enticing, but read the fine print before getting too excited.

Ads often sound like anyone qualifies and rates are good on just about any vehicle. Often this is not the case. It's not unusual for dealerships to use "bait and switch" tactics to get consumers in the door, only to find that what they thought was true isn't.

Look for the letters "OAC." Most consumers aren't familiar with this acronym, which means "on approved credit." In reality, only about 25% to 30% of consumers qualify for 0% financing. You have to have what's considered the best credit score - typically 685 or higher - to qualify for the special financing deal.

The fine print also might read, "Advertised vehicles may differ from shown vehicles," "0% available on all new brand 'X' automobiles, excluding brand 'Y' automobiles," "Prices good through 'a certain date' and are subject to change without notice" or "Rebate good only if financing is done through the dealership." These phrases mean that quantities and styles are limited, sales dates can change instantly and you might be forced to finance through the dealership.

Do you wonder how auto dealerships can offer great rates and a rebate too? Pay attention to what they're charging for GAP (guaranteed asset protection) insurance and extended warranties. GAP insurance covers the difference between what a consumer owes a lender and what an auto insurer will pay if a car is totaled or stolen shortly after it's purchased, when the amount owed is still high. Warranty programs extends the dealer warranty, making the resale value higher.

Your Credit Union offers these products at a substantially lower cost. Contact us today for all of your auto buying and financing needs.