This means that you can finance the purchase of a new vehicle and 100% of your monthly payment. Auto loans with a zero percent APR are car loans with no interest rate. This means that you can finance the purchase of a new vehicle and 100% of your monthly payment will go toward the principal balance of the loan, with no interest of any kind. A 0 percent APR or an interest-free car offer basically means that you borrow money for free.
Your monthly payments reimburse the lender for the money you paid to the car dealer, but no additional money from your pocket will go into the lender's bank account. Unfortunately, most lenders don't offer a 0% APR. In fact, these discounts are usually obtained through a car manufacturer and will be limited to select vehicles. Some buyers have suggested that 0% financing is a “bait and change” tactic of the automotive industry.
In addition, avoid taking it for granted that, since you have saved so much in interest, you could also buy extras, such as an extended warranty or additional car alarms, high-yield items that are sold at the finance and insurance office, just before signing the sales contract. Car dealers usually offer 0% financing only for new cars, and you usually need to have a very strong credit history to qualify for such an offer. Since the most popular loan term is currently 72 months, the monthly payment for an offer with a 0% APR may still be unaffordable for many borrowers. The best way to find an auto loan with a 0% APR is to check local dealers regularly and online.
Depending on the car and the manufacturer, you may find a rebate worth several thousand dollars, but these repayments are usually not available if you get a loan with a 0% APR. Credit unions, banks, and auto finance companies offer low-interest car loans that can fit your budget. This process may take some time, but it's essential to help you get an auto loan that fits your budget and maximizes your savings. We'll explain the potential drawbacks of an auto loan with a 0% APR and how to decide if an offer is worth accepting.
If a vehicle doesn't sell fast enough, the captive finance company offers 0% financing as an incentive to buy a car to entice buyers to choose that model. Some car manufacturers have been offering 0% financing, long-term loans and cash back bonuses due, in part, to the recovery from the COVID-19 pandemic. An auto loan with an annual percentage rate (APR) of 0% may seem like the perfect deal to get the car you want. Add to this the reduction in the supply of new cars caused by interruptions in the supply chain, such as the global shortage of semiconductors, automakers don't feel as pressured to offer offers.
You may receive an announcement from a local dealer encouraging you to take out a new car and apply.
