“When a car dealer offers to loan you the money to buy a car at zero percent interest, it gets your attention,” says Dee Ann Durbin, Auto Writer for the Associated Press.

It sounds like a great deal, but a little research shows that it might not be the best deal.

Durbin continues, “Dealers can offer zero-percent financing through automakers’ finance companies because, unlike banks, they make money on the sale of the car and don’t need to rake in interest payments. Although zero-percent financing offers have been common in the last four years, that doesn’t mean that everyone will qualify.  Zero-percent financing is generally reserved for those with the very best credit. Experian Automotive, which tracks auto loans, says 7 percent of new car loans had an interest rate of 1 percent or lower in the first quarter of this year. By comparison, 29 percent of new car loans had interest rates of 2.05 percent and below.

“Before biting on the zero-percent financing, check for other deals such as cash-back offers. Fiat Chrysler, for example, currently has two offers for the 2015 Jeep Cherokee SUV: zero-percent financing for 60 months or a $2,000 rebate. Edmunds recommends taking the cash to reduce your total loan amount from $27,000  to $25,000. Even with a 2-percent interest rate, you’ll wind up paying $12 per month less than the zero percent financing offer. ($440 per month with the cash deal. That compares to $452 per month with zero-percent financing.) ”

By taking the cash, you save $723 over the next 5 years.

Even better, save up and pay cash for your next vehicle, preferably a used one. By buying a good, used car you can save thousands of dollars in depreciation and interest.

77 percent of middle-income American families are living paycheck to paycheck. Christian Credit Counselors is a 501(c)3 non-profit credit counseling agency whose mission is to educate and empower families to become financially free by eliminating credit card debt.