Take a 0 percent loan or a $9,000 rebate on that new car?

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A customer was buying a new car, and she could either take a zero percent loan from the dealer for 72 months or get a $9,000 rebate on the purchase price.

She didn’t know how to make up her mind as to which would be the better deal for her, and actually called her bank wondering if it would be out of line to ask their opinion, especially as it was pretty clear that she wouldn’t be getting her car loan from them.

There are questions community bankers hear often and are happy to help customers consider their options on — even if, as in this case, there’s no “money” in it for the bank.

And this is an excellent example of why it can be such a help to develop relationships with local businesses, including a local lawyer, local service people, local stores and restaurants, all kinds of local professionals — and, yes, even a community bank.

A major online newsletter recently urged its readers to do business with community banks because it was good for the community and for the economy generally not to have banks that are “too big to fail.”

Big banks have their role. The Internet has its role. Both are exactly right for some people in some situations. No question. But some customers feel that big banks can be impersonal. And while all the information in the universe may be on the Internet, if you can’t find exactly what you need, that can be a problem.

Why cultivate a relationship with a community bank? Because it’s good to have someone to talk to about your finances, to have a relationship in place so you can get that important second or third opinion before making a big decision. Those are the times when a ten-minute, one-to-one conversation with someone in the business can make all the difference.

Also, local professionals often have good relationships with resources in affiliated fields — other people they can refer you to should you need additional help. It’s a time saver, often a money saver, and an easy-to-implement idea. Get to know the folks at your local bank.

We’re actually quite lucky here in New England and in Massachusetts to have so many independent mutual savings banks and co-operative banks — banks that are run for the benefit of their customers, not for the benefit of Wall Street.

And what was the right decision for the woman who had to choose between a zero percent car loan and a $9,000 rebate? It came down to whether she wanted to save money now in a chunk, or month-by-month in her car payments. In her case, and after a bit of conversation, it became clear that the chunk was right for her, and she took the rebate.

Nick Maffeo is the senior vice president, chief financial officer, and treasurer at the Canton Co-operative Bank in Canton. Have a question? Email to submissions@thecantoncitizen.com.

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avatar Posted by on Oct 14 2010. Filed under Opinion, Smart About Money. Both comments and pings are currently closed.
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