The Truth about zero Percent Auto Financing

When a car dealership advertises that you can get zero percent APR for your car, what does that mean? Well, in theory it means that your car will be financed for free, or that you will owe no interest on the loan. In practice, it is very rare for the car that you are going to buy to come with no interest, as you have to have a really good credit score to qualify. In reality it is better to go into the dealership thinking that if you can get around a four percent interest rate that you have gotten a good deal.

A dealer will advertise a 0 percent interest rate simply to get people into the dealership. While it may technically be possible to get a interest-free loan, you probably are just being naive if you think you qualify. You need to have tip-top credit, and probably a very long credit history as well. If you can walk out of the dealer with an interest rate of around four percent, you have done a good job for yourself.

Is it legal for a dealer to advertise that you could possibly get zero percent financing for your automobile? While it seems like a scam, advertisers obviously can pull that kind of a tactic. They can do so because they put in the fine print that not all people will qualify and that it only applies to people with tier one credit, which is almost perfect credit. Like I said before, zero percent financing is just a ploy for dealers to get people into the dealership.

The truth is that the car industry is doing terribly, and they need to do whatever they can to try and sell a car. They however, are not going to sell a car for free. That is a tough sell to a bank, and is a good way to lose the little profit that they have been able to earn lately. So if you think that you can qualify for the free financing, go ahead and try it, as some will qualify, just not very many.

You may have better luck qualifying for the zero percent financing if you are buying a used car. The used cars are cheaper, and the terms usually are easier to come to. The older cars cost less, and the payments are lower, so you can bet that the risk of someone not paying the loan off are less likely. With less risk, there may be more of an incentive to just make the deal, and make whatever money they can off the car.

If you want to buy a new car, you might be enticed by zero percent financing. The problem is that most people will not qualify for it if they want a new car. In fact, most people won’t qualify for it at all, but as a sales tactic it isn’t a bad place to start when trying to get people into the dealership. Aim for the lowest possible percentage, but don’t be shocked when you walk out of the dealership without that zero percent interest loan.