Some dealerships are offering a promotion to get business: buy a new car, put no money down, and get a check for $5,000. Is this real? Yes. Should you take advantage? No. The bottom line is that this is not a free $5,000, it is being added to the cost of the vehicle.
Car lenders will actually allow customers to take out new car loans that exceed the value of the loan, up to 20 percent. That means when you buy a $25,000 car, a friendly lender can loan up to $30,000.
This type of loan can result in becoming “upside down” (owing more on vehicle than its worth). This can lead to a snow ball of bad financial decisions for future car buying. Be an educated car buyer by researching vehicles, loans, and interest rates. Know before you go!
Read more at: http://redtape.msnbc.com/2011/01/buy-a-new-car-and-get-5000-not-really.html
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