5 Facts You Should Know About 0% Financing


When we hear that a certain automotive company is offering cars on 0% financing, we tend to get carried away. I mean, what could be better than getting a loan with no interest at all? Some people tend to get suspicious, because 0% interest on a car loan is something too good to be true. To the cynics, 0% financing actually exists, and as much as you think it’s just a motivator, it isn’t. Well, sometimes. And to those who believe too easily, though 0% financing is totally legit, not everyone can qualify for it and of course there are some disadvantages.

Here are some facts that you should know about 0% financing:

You must have excellent credit – This could vary as per the automaker’s policy. While some companies do not compromise on the credit score of the buyer, others might let you in the deal for a less perfect credit.

The cynicism comes when some automakers play bait and switch. As people go to the dealership to buy a car, they are told the deal is only for high credit scorers. They are then offered to buy cars on a higher interest rate.

That being said, if you possess a good pay back history on loans and are loyal to the brand, the company might be willing to sell you a vehicle on 0% finance, no matter what is your credit history.

Short term loan and bigger payments – 0% finance on a car mostly means, you would have to pay big amounts of money to the dealership in a short span of time. No matter how enticing 0% financing might look, most people go for a regular car loan, because the pay back installments are smaller and hence easier to manage.

However, there’s one positive thing about 0% financing i.e., you will get the ownership of the car sooner than you get through a conventional loan.

You cannot buy just any car on 0% finance – Not every car is open for 0% financing especially the premium models.

Prices of cars available on 0% finance are mostly non-negotiable – When you buy a car on 0% finance, you might not be able to negotiate on the price, because they’re sold on a full recommended retail price. But some dealers might be open for negotiation before any deal is finalized.

You might buy a car that isn’t that popular – Even though, this should not stop you from buying a car, but there’s more to it. It is possible that the model offered on 0% finance has not been a success in the market and the dealership wants to get rid of it and earn a reasonable profit. So, before you get fooled by the amazing deal, do your homework and check if the car available on zero interest is a successful piece of machinery.

0% financing has been around for years and it has its pros, but many times, people are lured into buying wrong cars with this sales tactic. If you keep the above facts in mind and do your homework before jumping at the offer, you can save yourself from an unprofitable deal.

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