0% Myths

Even if you’re among the minority who qualifies for a 0% rate, don’t assume it provides the most savings.  Sometimes you’ll come out ahead by applying a rebate to the purchase price and using your own low – interest rate loan.  Evaluate both options to see which is best for you.

Myth Truth
With 0% financing, I’m guaranteed to get a good price. Although it’s not true in all cases, a disreputable dealer offering 0% financing may inflate the price of a vehicle to make up for lost finance charges, or make it more challenging to negotiate a lower vehicle price. A reputable dealer will allow you to negotiate the best possible deal before applying the 0% finance to your sale. Get in the know before you buy and do your homework on vehicle pricing.
0% is good on long-term loans. Sometimes the length of loan term affects the rate offered. Although there are exceptions, if you choose a more conventional four or five-year term with smaller monthly payments, you may end up paying interest on your vehicle loan. Ask upfront about the length of the loan term available with 0% financing.
0% is available for the car I want. With 0%, your choice of vehicle options can be greatly limited. Most 0% deals apply only to the vehicles on the lot and may not include special option packages or premium models. Plus, the most popular vehicles and new models are typically not available with 0% financing. Keep in mind, if you have your heart set on a particular make or model, you may not be able to get it without paying interest.
I can use the cash rebate and 0% to save more. Unfortunately, most auto manufacturers offer a choice between a cash rebate or interest-free loan—not both. If you opt to take the special financing, you can lose out on thousands of rebate dollars. Do the math ahead of time to find out what would save you more money, the rebate or the financing.
I’m sure I’ll qualify
for 0%.
Not everyone qualifies for the 0% rate. It’s sometimes reserved for buyers with the best credit, which usually means only one out of 10 people are eligible. Also, you may need to reach a certain annual income level to qualify. Find out upfront if you meet the requirements for 0% financing.
With 0%, I don’t need to worry about price. Think 0% financing means you’re already saving all you can? Think again. Even if you qualify for the 0% rate, you can save even more money by shopping smart, negotiating your vehicle’s final price, and taking advantage of any additional incentive offers. Watch your bottom line and don’t leave money on the table.