Financial Tips

Is a 0% Auto Loan Good for You?

Crazy question, right? It sounds great. But getting a zero percent loan can actually cost you more money compared to a low interest rate loan. If the dealership gives you the option of a 0% loan or a rebate of some amount, you may end up paying less for the vehicle by taking the rebate and financing through a low-rate loan.

First, Some Math
Some dealerships are offering rebates up to $12,000 off MSRP for select vehicles.¹ That’s a lot of money you could save! Of course, a rebate of that amount is less common than a rebate of a few thousand dollars, so let’s use a more practical example:

You’re looking at a car for $24,000 and you can either take a 0% loan or receive a rebate of $5,000. If you take the 0%, you pay the $24,000 in the long run. If you take the $5,000 rebate and finance a loan for $19,000 at an interest rate of 2.69% APR* for 66-months, you will end up paying $1,461.42 in interest, or $20,461.42 total.

As you can see, in the long run, you saved a few thousand dollars by taking the rebate over the 0% loan. Of course, this won’t always be the case and the details of your circumstances will differ. The point here is to not jump in to a 0% interest loan without comparing your options.

To help you explore your options, feel free to use our “Compare Two Vehicle Loans” calculator or call one of our Member Service Representatives at 619-297-4835.

Digital Wallets: Contactless, Safe, and Secure

According to a report by the Emerging Payments Association, the pandemic has accelerated the use of contactless payments – which is helping to keep consumers safe and healthy. We have also seen a decline in cash transactions and an increase in card use overall.

To take advantage of this safe and hygienic way to make purchases, store your Wheelhouse Cards on your mobile device and conduct all of your transactions contactless moving forward.

You can add the Wheelhouse Visa^® Debit Card and Credit Card to any of the following digital wallet apps today.

Stay healthy and safe.

Using My Tax Return

Tax Return: Not a phrase you would expect to hear this time of year. Of course, due to COVID-19, the tax deadline for 2020 was extended from April 15 to July 15. So as of yesterday, everyone should have there “i”s dotted and their taxes filed. If you’re expecting to receive a tax return soon and are interested in the best ways to use it, here a few initiatives we think are worthwhile:

Whether you have credit card debt, student loans, auto loan debt, or anything in between, using your tax return to pay down debt may be the smartest move for you. Compare the interest rates on your loans and credit cards, as well as considering any forbearance or suspended interest accrual, to determine where to apply your tax return for the maximum benefit.

If you find your debt is manageable and you would benefit more from saving or investing, consider putting your tax return into an emergency fund, a retirement savings account such as an Individual Retirement Account (IRA), or in investments such as stocks, bonds, mutual funds and similar options.

If you are comfortable with your debt or lack thereof and feel you have sufficient savings and/or investments, you may want to use your tax return for purchases that will save you money in the long run. These kinds of purchases would be items such as energy-efficient appliances, solar panels, electric vehicles, or xeriscaping. Take a look at where your money is going – water, electricity, gas etc. – and determine which area you could reduce your costs the most.

Visit our Energy Efficient Resource Center to learn more about solar and energy-efficient options.

Using your tax return to take out a Share-Secured Loan may be to your benefit. Doing so can help boost or build your credit score. It also allows you to keep your money in a savings account or certificate, so you can earn dividends on the funds rather than cashing it in for a purchase.

If you are interested in a Shared-Secured Loan, speak to a Wheelhouse representative today.

Although these are “our” top picks for how to spend your tax return, you may find more benefit through another avenue. You could also split your refund using multiple strategies and benefit in a variety of ways. In the end, you want to be sure to analyze your finances and determine how you can the most out of your tax return, based on your personal circumstances.