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).
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.