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0% Car Finance Explained
0% Car Finance is an offer which many new and used car dealers spend a lot of time and money advertising and it is designed to entice customers to buy from them instead of their competitors. It is becoming a far more widespread incentive offered now that interest rates are creeping up and the so called credit squeeze is on. On the face of it 0% Car Finance is a great offer but there are several things to consider before you decide to go down this route. Firstly, as with all things in life, there is no such thing as a 'free lunch' and 0% finance is usually no exception. The cost of the finance will often have already been added to the price so that effectively you are paying for it yourself by buying a car at a higher price than normal - this is especially true with used cars. However, there can be exceptions. For example the manufacturer themselves may decide to absorb either all or at least some of the finance costs on offering a 0% deal so that it is more truly 'free finance' and these deals are particularly attractive and definitely worth considering if you were planning to take out finance anyway. Even if you have the cash to buy outright it may make more sense to leave it in the bank earning interest whilst you pay off the 0% loan. One drawback to 0% is that it often accompanied by the requirement for a high initial deposit - which can take it out of reach of many customers at which point the dealer will try to sell you a differnet type of finance more profitable to themselves. It may be worth taking out a normal loan to gather this initial deposit amount but you need to do all your sums carefully. So in a nutshell many Dealers will use the 0% finance option as an advertising tool to get customers into their showrooms. Best advice is to definitely consider any 0% deal on offer but do all your sums carefully and ensure that there isn't another option of buying the car without 0% but at a much lower price. Cheap Cars Online - Your Online Friend For New Car Buying! Disclaimer: All information on this site is provided in good faith for guidance only and is subject to human error. We cannot be held responsible for any loss or damage caused through following any of our advice or suggestions. Please ensure you are completely happy with any new car deal you undertake before going ahead and check with your local Trading Standards or the Office Of Fair Trading if you have any doubts. Check the individual car manufacturers website for the latest info on any particular car before buying. Copyright ©2008 all rights reserved |