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0% Financing – Is It For You?

car dealership
Going after your first car?

Don’t start by looking at different makes or models. Start by looking at yourself.

  • How much money can you spend on a car?
  • Do you need to borrow?
  • What kind of car do you need?
  • How often will you be driving the car?

Yes, this is the boring part. However, doing your homework will boost your confidence. Many people find car buying and negotiations stressful and threatening. With all the numbers in your head, it might be less stressful. As you enter a dealership, remember what you want and what you need.

If you are getting a loan, research your credit history. Finance companies have very high requirements for some offers, so be sure to correct any inaccuracies on your credit report before visiting a dealership. Make sure you have checked with your bank as well. Getting a pre-approval might be a very good idea.

Automakers sometimes offer a choice of a rebate or 0% financing. Which is better?

Most experts will tell you that even if you qualify for a 0% rate, you can save more money by negotiating your vehicle’s final price, and taking advantage of any rebates. With a low interest rate from your bank this might actually save you more than a 0% financing deal. Remember, the 0% financing deal might have inflated the price of your vehicle to make up for lost finance charges. Nothing in this world is really free.

Some will even tell you that financing is one of the areas where car dealers can use all kinds of tricks to make you think you are getting a better deal than you actually are.

You should also remember that not everyone qualifies for the 0% financing. These deals are often reserved for buyers with the best credit score. This is another reason you should research your credit history and know your credit score. The lender usually has higher credit requirements than independent banks and credit unions.

A 0% financing deal also comes with limited vehicle options. The most popular vehicles and models are usually not available for this deal. They will sell without.

If you go with a 0% financing deal, make sure you know the terms. Many offers are for short term loans of 36 months or less. Make sure this fits your budget.

Ready to close a deal? Never pay cash for a deposit on your car. If something goes wrong, you’ll never get your cash back. You can always dispute a credit transaction.

Never drive away with a car unless all paperwork are done. And very important, a loan must be final and approved.

About Mark
Problem solver. Entrepreneur. Music nerd. Traveler. Twitter: @markheart0 Facebook: Mark Heart


  1. Geico insurance company has a cool free tool that can do the math for you. Check it out here:

    Rebate is often a better deal.

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