FACT: Most auto manufacturers offer a choice between a cash rebate and special financing. A buyer may not receive both. If you select special financing, you give up thousands of dollars in rebates. You are often better off to decrease your loan amount by applying the rebate as a down payment. Your monthly payment may be smaller even though you pay a small amount of interest. Ask the dealer for a side-by-side comparison of monthly payments:

• Applying the rebate and financing the reduced amount using a credit union loan
• Applying the special financing

FACT: The dealer offering 0% financing may expect to get a higher purchase price for a vehicle to make up for lost finance charges. This may make it more difficult to negotiate a lower price. In fact, some buyers don't even try to negotiate a good deal because they feel they are getting a good deal on the financing. Your best approach is to negotiate as a cash buyer, then ask for the special financing or the cash rebate.

FACT: 0% loans are not available on all cars. Usually the most popular vehicles and new models are not available with 0% financing.

FACT: 0% loans are usually reserved for buyers with the best credit. Not everybody qualifies for these loans. Buyers often don't discover that they can't qualify until after they have negotiated their deal. To avoid paying more for your car than you should, always know your credit score and ask the dealer beforehand if you can get special financing on the vehicle you want with your credit score.

FACT: Many 0% loans are written for 36 or 48 months. This makes the monthly payments, even without interest, much higher than a conventional 60 or 72 month loan.

FACT: Some 0% loans are written with an "incentive period", after which the outstanding balance must be refinanced at a used car interest rate (typically 2 to 3 percent above a new car rate). Buyers that do not pay off the loan within the incentive period often pay more interest than if they initially financed using a conventional loan.