We provide this free financial resource to visitors of the Community Room of SeniorSSuperStoreS in an effort to keep baby boomers, seniors and the elderly informed of matters that can affect their lifestyle.

When our nation perodically falls into economic doldrums, manufacturers of durable goods, especially car makers, need to find a way to stimulate consumers to buy. A popular way is to offer rebates and / or cheaper financing.

The ads read: "0.0% APR financing" or "Get $1500 cash back." Are these promotions really a good deal? A closer look at the numbers can help you decide.

Generally, promotional financing offers fall into three broad categories:

1.) Deal buy downs: The dealer pays a fee to the lender in order to offer a reduced interest rate. The rate is reduced, but you can also pay more for the car, appliance or whatever. It's best to determine the item's price without special financing.

2.) Mixed rebate / low rate offers: Here it's best to compare the numbers, since the amount you borrow has the greatest impact on your total cost of borrowing, and thus the total cost of the item. Generally speaking, if you have a choice of low rebate and higher interest rate, vs. higher rebate and lower interest rate, you'll likely be better off taking the higher rebate.

3.) True rate reduction: The manufacturer subsidizes the cost of the financing, usually to boost lagging sales.

The following examples can help you determine if a rebate or low rate financing is a better deal for a car purchase. These figures are based on a $20,000, five-year loan, at 7.75%:

* A rebate (or price reduction) of $250 is equal to an interest rate reduction of 0.53%.

* A rebate (or price reduction) of $500 is equal to an interest rate reduction of 1.06%.

* A rebate (or price reduction) of $750 is equal to an interest rate reduction of 1.60%.

* A rebate (or price reduction) of $1,000 is equal to an interest rate reduction of 2.15%.

* A rebate (or price reduction) of $1,500 is equal to an interest rate reduction of 3.25%.

* A rebate (or price reduction) of $2,000 is equal to an interest rate reduction of 4.36%.

* A rebate (or price reduction) of $2,500 is equal to an interest rate reduction of 5.50%.

* A rebate (or price reduction) of $3,000 is equal to an interest rate reduction of 6.67%.

When you're shopping for that new car and need to finance it, don't rely just on the financing package that the dealer is offering you. Check with your own bank or credit union, and plug the figures into a loan calculator on your computer before committing. The little extra time you spend comparing and running the numbers yourself may save you a bundle in the long run.

(Courtesy of USAA Federal Savings Bank. To learn more of the bank's services, call 1-800-830-3598.)