0% Finance Car Deals

Car advertising shows that hot brand new car just begging you to buy it. The ad also says the dealer will give you 0% financing on it. Is that a good deal? Here is what you need to know about 0% financing on your auto loan.

Although 0% finance on car loans is relatively rare these days, there are still a few deals available. Compare the whole car insurance market with our no obligation loan car loan calculator and discover if 0% finance on car loans could be an option for you and your circumstances.

Car dealers are out to make money – like any business. This means that they have to work to constantly get a new turnover of clients all the time. 0% financing is just one of many tools used to get the general attention of the public so that they will come and take a look. And if you are wondering – yes, there is a catch that may make their more regular offers a little more enticing – once you understand the actual offer.

The dealership will probably tell you that they can give you the cheapest and best possible loan. However, it is not the actual dealership that is providing the loan but a lender whom they use on a regular basis. About the only way you would be able to benefit from taking a loan offered by the dealership is if you got a 0% interest rate and could pay off the loan within that specified period.

Used vehicle finance deals vary and it is essential that you read the terms and conditions that come with the loan. It is here where you are able to find out how much the loan costs in total, how much interest will be added onto the loan and if there are any fees attached to the loan. Some loans will come with early repayment fees and this would mean that if you were lucky enough to be able to repay the loan off early you would have to pay a one off lump sum of money, typically around two months’ interest.

A car dealer offering zero percent finance usually will be having a specific customer at mind. They offer it to individuals who can actually afford such an offer. For such deals, the customer needs to have a somewhat outstanding credit background. So zero percent car loan deal is something of a mere mirage to an ordinary client, for most probably an ordinary person is likely to have at least one blemish in his or her credit report. Usually it is to already existing customers that car dealers propose such deals. For new clients, they set up a standard for credit background such as income parameters, location of the customer, employment or business status, or even the assets that the customers own.

The credit reports of the customers are considered in the case of the zero percent finance deals. Not only this, the guidelines and other terms are also severe for the credit score. If a person is suffering from the bad credit history then he could be denied of the car finance. To get the zero percent car finance deal a person must have the credit score of above 700. This criteria of the bad credit score can makes a person ineligible of getting the loan because most of the people who are applying for the zero percent car finance deals have a bad remark on the history of the credit.

In case you are unable to pay your monthly installment of the zero percent credit term on time, as a penalty you need to pay a high interest rate. You also need to pay other penalty charges which make your deal much more expensive than what you could imagine.

Another aspect of zero percent car loan deal that deserves a special look is the fact that this particular financing is always restricted to certain makes and models of cars only and not to all models. Normally, these will be cars in stock that the dealers want to get rid off. If at all the model is okay with you, you may find it difficult to get the color and interiors of your choice with these zero percent car loan deals. You are supposed to be satisfied with what the dealer offers you, even if it is a brand new car.

Though not always workable for an ordinary customer, zero percent car finance is definitely a good marketing strategy that the business can employ to attract customers; and is definitely emerging as one of the most sought after car loan deals in the United Kingdom. The thing is that the zero percent car finance does work both for the car dealer and only those customers who can afford it.