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Archive for August, 2012

Low APR vs. Cash

There is a wide range of financing alternatives for customers in search of a new automobile. Of course you can pay cash, but for many if not most that choice involves factors such as the annual percentage rate and a “cash back” incentive. Cash back is a popular enticement that dealerships offer in order to encourage people to buy a new vehicle. While these offers seem like a good deal, potential buyers should weigh other factors to determine if the cash-back incentive makes the most financial sense. Here are a few common options explained:

Cash-Back Program:
Cash-back incentives typically are offered by the car manufacturer as a cash-back reward for people who buy a new car. For example, a consumer goes to buy a new 2012 Hyundai Eqqus Signature from a Phoenix Hyundai dealer, agrees to a financing plan and uses the $2,500 ‘cash-back’ incentive as part of the cars down payment.

A new car is a major purchase, and few people pay cash for it. Most consumers obtain a loan to buy a new car or finance the purchase through the manufacturer or a financing department. A car loan, like any loan, comes with interest rates, known as an annual percentage rate, or APR. For example a 2012 Hyundai Vercruz Limited for as low as 0% APR financing for a 36-month loan.

Low APR or Cash Back?
Some car manufacturers offer a combination cash back and a low interest rate. Some of these offers are either/or, meaning the consumer may choose either the cash-back reward or the low interest rate, while others offer both cash back and low interest.

If faced with the decision of purchasing a new car with a cash-back incentive or a low APR, you must perform a few calculations. There are several automobile websites that offer calculators that help with this task. For example, if you’re offered $5,000 cash back or a 1.0 percent APR on a 48-month loan for purchase of $24,230—with no trade-in or cash down—you’ll save $13 per month by choosing the low financing over the cash-back offer.

Cash Purchase vs Low APR:
Another option for Scottsdale Hyundai car buyers is to skip financing altogether and pay for a car in cash. Buying a car in with cash saves you money in the long run as you don’t have to pay interest, but it also takes a lot of money out of your pocket. As long as you aren’t taking money out of your emergency funds or selling other assets to purchase the car, buying a car with cash is often a good option.

For consumers who drive hybrids or alternative fuel cars, every month is Fuel Efficiency Month, but Hyundai is now petitioning to make August the official “National Fuel Efficiency Month”.

John Krafcik, president and CEO of Hyundai Motor America was quoted saying “”There’s a day, week or month for just about everything else, so we feel the time is right for a national Fuel Efficiency Month to help shine a spotlight on the ecological and economic benefits here”.

With four vehicles who achieve 40 mpg highway or more and an absence of gas-guzzling SUVs, Hyundai can actually claim to have the highest fuel economy and lowest CO2 of any U.S manufacturer. It even sold more 40 mpg vehicles than Toyota, Nissan, Honda, Ford and Chevrolet combined last year. Scottsdale Hyundai is leading the way to inspire people into reducing fuel use.

Hyundai kicked off their campaign on World Environment Day in New York, Austin, Chicago and Las Vegas. At each kick-off event consumers could learn about efficient driving and the benefits of driving greener vehicles. The national Fuel Efficiency Month is overall meant to improve fuel-efficient driving skills, raise awareness of routine maintenance and of course to show the reasons to buy a Hyundai.

The company officially sent its petition, which held over 25,000 signatures, on July 5th to Washington. You can keep updated on the progress of National Fuel Efficiency Month by visiting Hyundai’s Facebook page. You can also stop by your Phoenix Hyundai dealer for more information.