When it comes to auto financing, all 0% or low interest car loans should be examined closely. New care dealers often offer 0% financing, along with other unusually low financing rates, as special promotions or “teaser rates.” While 0% financing offers are enticing, you should always read the fine print and know the facts before heading off to your local dealer. The variations of interest rate, like pricing, can drastically change from car dealership to car dealership. Knowing what to look for and which questions to ask a car dealer can help you decide if a 0% auto loan is the best option for you, or even an available option.
Following are a few facts and potential restrictions that can often apply to 0% auto financing:
- A perfect credit rating is almost always needed to qualify for 0% interest on car loans. Only about 5% of all car buyers qualify for 0% financing.
- 0-percent financing usually means that the terms of your loan will be shorter with larger monthly payments.
- You may be limited in your vehicle choice. 0-percent rates are usually offered on only a limited number of models.
- In order to get 0% financing, you may be required to give up a manufacturer’s rebate.
- Even if you qualify for 0% financing, sellers often make up for the lost finance charges by increasing the overall price of the product.
Whenever you see a low interest loan, or 0% interest rate, always get the details about the rate before making a purchase decision. Also keep in mind that you can always research many 0% auto loans via the Internet. The truth of the matter is that 0% financing is really nothing more than a marketing tool to attract car buyers.
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