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Be On the Lookout For the Fine Print on Zero Percent Interest Deals

How Does Zero Percent Car Financing Work?

One can hardly turn on a television without seeing one of the major automakers touting monthly incentives on their lineups. Some of those incentives sound too good to be true. Specifically, we are referring to deals that include zero percent financing. Certainly, this is a good deal for buyers to borrow money without having to pay interest. So, what is the catch? How does zero percent car financing work? We know that this can be confusing for even the most experienced car buyers. That’s why our team put together a few insights to help. Let’s see what they found.

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Do Banks Offer 0% Car Loans?

Anytime there is a zero percent financing offer on a TV commercial, that is almost certainly coming from the manufacturer’s financial arm. These incentives are designed to drive traffic into franchise dealerships, and they come with some significant strings attached that aren’t immediately clear.

What is the Catch for 0% Financing Deals?

Original equipment manufacturers rely on people not paying attention to the details of a zero financing incentive. The first major catch is that while they won’t pay any interest, they will be paying full price for the vehicle, meaning no other discounts are likely to be allowed. Additionally, The zero percent deal only lasts for a set period of time. If the vehicle isn’t paid off in that time, the buyer will be on the hook for the rest of the money – often at a very high interest rate.

How Do You Qualify for 0% Financing?

In most cases, only people with exceptional credit scores are going to qualify for this kind of incentive. People with average credit histories and/or lower scores may qualify initially, but they will be hit with other consequences down the road that could affect their ability to pay each month.

The team at Davey Auto Sales has a lot of experience helping people find affordable and honest financing solutions to help them get the safe and reliable vehicle they need. Make an appointment with one of our product experts today.

Feb 28th, 2024