Zero Percent Car Finance Deals: Pros and Cons

Zero percent finance on car loans– one of the most sought after sales strategy that is being adopted by dealers and lenders nowadays. Thousands of pounds will be going in the name of interest. But zero percent car finance deals help you save that money. And so, like bees to flowers, buyers are getting attracted to this new conception. But when analysed closely, this strategy has many drawbacks and is in fact nothing but a method to attract customers.

Only one-third of buyers who apply for zero percent financing actually gets qualified for the loan, statistics reveal. There are quite a few criteria that you need to accomplish.

Credit Score: Credit report is a matter of prime importance so far as these zero percent car finance deals are considered. But the rules regarding how your credit history should be is very severe. Bad credit history makes the idea of getting the 0% car finance loan, a mere mirage. An outstanding credit score of more than 700 is demanded by these deals. Since a normal borrower will be having atleast one bad remark in his credit history, this very credit score criterion denies one the zero percent car finance loans.

Select Models: These loans are applicable only on a few selected models of cars. The trap is there that these selected models will usually be those which are not in demand or those which have a poor performance so far as fuel economy, mileage or efficiency is concerned. Often this is the dealers attempt to remove such vehicles. Sometimes vehicles may be available in desired models. But colour and interior designs may fall short of your expectation.

Short Duration: Another interesting tactic offered by dealers providing zero percent car loans is specifying shorter loan terms. A maximum term of 36 months is usually fixed by these dealers where as a typical buyer prefers to finance a vehicle for 48 to 72 months. Though it is true that no interest is charged, the monthly payments will be higher owing to the shorter duration.

So it is already clear that these 0% car finance loans cannot be taken for the best deals available. More advantageous car options too are there. Be particular about getting into an economic deal.

Know more about cars on finance.