When you see the words ‘0% interest’ in relation to car finance, you might feel it’s the best offer on earth. It might not be free money, but surely it’s the next best thing – cheap money? Unfortunately, such a deal may actually cost you more, so you should always do some calculations before jumping straight in.

In this wallet-watching decade, there’s a growing trend for car dealerships to offer 0% interest through their preferred finance companies. They can do this because they can shift the profit to the sale price of the car. They also treat it as a marketing cost involved in getting customers onto the forecourt, particularly if it’s only available on the models they need to shift.

There’s another catch, of course, and that is that the more you need a cheap deal, the less likely you are to get it. Unless you can offer watertight credit-worthiness, you’re not going to be lined up for that amazing deal, as it will only be available to the lowest risk customers. However, once you’re in the showroom, the sales staff may still guide you towards a dearer, higher interest loan with their preferred finance company. By that point, you'll probably already be sold on having a particular vehicle.

There are a few things you can do before following up on an offer that looks too good to be true (it usually is).

• First, find out your own credit score. This will help you to know whether you’re in a position of strength or not before approaching a dealer - it makes a huge difference. Even better, shop around and see what other financers will offer you on that basis.
• Next, compare deals. Add up the total repayments over the loan’s term, as well as the purchase of the vehicle. Check how long the zero percent will be in place for, and what the rate will be after that. You may find that low interest rate deals actually cost less than zero interest.
• Consider other types of promotion, such as cashbacks, which you could use to make a payment towards your loan.
• Look at your own situation. You might gain a cheaper deal with an alternative financer if you can make a good down payment or get a good trade-in price on your current vehicle.
• Never forget all the costs involved in buying a car, including hidden costs, such as delivery and registration. Calculate these before test-driving any vehicle.

As always, the advice is to do your homework before rushing into a purchase. Here at 1800Approved, we work with over 30 different independent lenders, so can help you consider the options, and find the best deals for you.