Chrysler Rebates & Cash for Clunkers- Save More with a Low Rate Loan From Your Credit Union

Yesterday, Chrysler announced their "Double CA$H For Your Old Car" Program which offers consumers up to a $4,500 cash rebate or 0% financing when they purchase a select Chrysler, Dodge or Jeep vehicle. A great incentive, as a credit union member, your best savings will come when you take the rebate and a low rate auto loan from your credit union.

Why the rebate instead of the 0% financing offer? As we mentioned in an earlier blog post, The Myth of 0% Financing, you save more money when you take the rebate because it's the final cost of the vehicle that's important, not the finance rate.

Let's look at this example. You want to purchase a 2009 Chrysler Sebring. You are trading in a 1993 Toyota 4Runner. You can either take the $4,500 rebate from Chrysler and get a great low 5.50& auto loan from your credit union or you can take the 0% financing. Which is better?

Total savings from financing at your credit union vs. the 0% loan: $1,708.

Here's how they both break down:

Credit Union Financing

• Loan Term: 72 months
• Loan Rate: 5.50%
• Vehicle Price: $25,000
• Chrysler Rebate: $4,500
• Cash for Clunkers Rebate: $4,500
• Loan Amount: $16,000
• Monthly Payment: $261
• Total Amount Paid: $18,792

0% Financing

• Loan Term: 72 months
• Loan Rate: 0%
• Vehicle Price: $25,000
• Chrysler Rebate: $0
• Cash for Clunkers Rebate: $4,500
• Loan Amount: $20,500
• Monthly Payment: $285
• Total Amount Paid: $20,500

Remember, financing only affects the interest you'll pay on your vehicle loan. Rebates reduce the total price of the vehicle. So, if you qualify and take the 0% loan, you'll pay more than if you took the 5.50% and $4,500 in rebates. Why? Because the total cost of the vehicle is more without the rebates. Bottom line: the total amount you'll pay for the car is what's important, not the finance rate.

Do your homework and be sure to stop by your credit union and get pre-approved for your vehicle loan before you head to the dealership. Be ready to negotiate and walk out with the vehicle, rebates and loan payment you want.

Hint: Credit Union Financing + Manufacturer Rebates = Your Best Financing Option!

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Boycott GM?

Some pundits have called for boycotting General Motors, declaring that we should not support American auto companies that have been subsidized by the U.S. Government. Why - it's not as if the auto industry is the only industry that is subsidized - the government has helped and subsidized many industries for years. Do we boycott food products because of farm subsidies? Do we boycott electricity or natural gas because of utilities subsidization? Boycotting GM will only harm our economy. For each taxpayer, this means never getting back the money we loaned to them. For millions of American workers it means unemployment - which will be an even larger burden on our government. The debate needs to be moved from how we feel about the government's involvement and politics in general to what is best for American workers and our country.

Let's look at some facts about GM and the American auto industry*:

• GM employs nearly as many Americans as all foreign automakers combined
• GM operates more plants in the United States than all foreign automakers combined
• Toyota employs less than half as many American workers as GM
• If Detroit used as little "domestic content" as foreign automakers, about $49 billion in U.S. parts sales - and 1 million jobs - could have been moved overseas last year
• Automakers are our largest exporter and one of the biggest buyers of steel, rubber, glass, electronics and computer chips
• Nearly 1 in 10 scientists in the U.S. work for American automakers or their suppliers.

In our June 9th blog, Why Buy An American Made Vehicle, we highlighted a staggering statistic - over 3 million jobs depend on the viability of the Big Three. It's clear from these facts that a boycott of GM would not just affect the auto industry and Michigan; it would have a devastating effect on industries and families across the country.

The bottom line is that GM needs to improve their finances. The best way for them to do that is to sell more vehicles. If GM's finances improve, the government can diverge from the company, American jobs will be saved and taxpayers can get a return on their money. If a boycott is successful, not enough vehicles are sold, the company goes under, millions of people lose their jobs and taxpayers do not get their money back. Which one of these scenarios seems like a better option for our country to you?

We need to keep the focus on the American workers and the jobs across multiple industries that depend on GM and the U.S. auto industry as a whole. As credit union members, we can help by participating in Invest in America, purchasing a GM or Chrysler and financing it through a credit union. Let's do all we can to support the auto workers, and the millions of other American jobs that depend on the U.S. auto industry.

*Level Field Institute