0 apr financing car deals
Is 0% APR financing right for you?
Finance with Texans CU and beat the 0% APR financing myth
Many dealers are offering 0% APR financing and cash rebates to drive traffic into their dealerships. 0% APR sounds pretty good so why not take the dealer up on this offer, right? Not necessarily.
- Available to well-qualified buyers with near perfect credit, so many applicants are ineligible for this rate
- Much shorter terms (24-36 months vs. the average 60 months), meaning a larger monthly payment
- May apply to slower selling models only, giving you less selection to choose from
- Cash rebates normally do not apply with 0% APR financing, forcing you to choose between the two offers
When the dealer offers a rebate as an alternative, you can often save more on your new car than if you chose 0% APR financing. Simply do the math to see your savings—when you apply the rebate as your down payment on the vehicle and include your low rate with Texans CU, you'll often come out ahead with this option. Consider an example:
Is a 0% APR car loan too good to be true?
No. A 0% car loan is not too good to be true. In fact, it is a great way to finance a large depreciating asset like a car.
An auto purchase typically involves a significant monetary outlay. The average car price in 2013 is now roughly $31,252. This type purchase is one that many consumers cannot make from existing savings. Many of these purchases require the potential buyer to obtain an installment loan to pay for the car.
In order to compete with other auto dealers, some will offer 0% financing. Basi.
Entering into the car buying coliseum can be traumatizing at best. Good luck with your adventure.
That said, somebody, somewhere has got to be paying for the money you'll use for this transaction. They are not getting money from any lending institution for free. So that cost is buried somewhere in the cost of your vehicle. Please do not fall for the "here's the invoice" gambit. There are incentives and cash available from the manufacturer to the dealer even after you pay "invoice price" that can add to dealer profit at "invoice price".
There is really NO SUCH THING as a 0% APR car loan. read the fine print! Every commercial I have seen, and documentation I have reviewed for clients or community members includes a "fee9quot; of some sort, based on the amount of the loan, which - in my opinion - is just hiding an APR on the loan.
This "fee9quot; is often stated like,
"monthly processing fee of $16.67 per $1,000 loan value"if my calculator is correct, that's basically a 1.667% loan. NOT a 0% loan. Don't get me wrong, a 1.667% loan is a phenomenal rate. but don't tel.
There are 0% APR car loans; however, they are only available for people with extremely good credit scores. Car companies use these advertisements to get people into their stores and then they break the bad news as far as what financing plans they can offer you. If you are about to buy or lease a car, I would advise you do to do your homework before you go to the car lot. See what specials and deals the dealership has advertised. Get a good idea on how much the car is really worth. Know what your credit score is and then figure out wha.
0% interest rates may be available, but that does not mean you are getting a good deal. A vendor could jack up the offer price and spread out your payments such that their inflows (your payments) were the same as those associated with a lower price/higher interest combination.
You also need to be wary of whether the initial interest rate is simply a teaser such that higher interest rates apply later in the contract. To help eliminate any confusion, request a complete payment illustration. Avoid someone who is unclear about your paym.
There are several moving parts in the purchase of a car. So you get a deal here and you overpay there. I would shop around and find out what the car should really cost. Then compare that to what you are paying for a 0% APR.
Buying a new car guarantees you are going to lose about 30% of the purchase price the minute you drive off the lot. Go to http://swaplease.com and you can find a realistic value for practically any car. You can assume the financing of those cars or get your own. It is worth doing a little work to keep from making a m.
Since lending money has cost, it stands to reason that it should be more than 0%
What a 0% car loan means is that the cost of financing is buried into the cost of the car. You don't see a separate line item that says interest, but it is in there somewhere. Unfortunately, if you tell your dealership that you are willing to pay cash for your car if only they reduce the price, since they now they don't have a cost of hidden finance, they will probably refuse.
That is because the dealer is not paying for the cost of finance, th.
Hey there, I think the "bad9quot; part about this is that when you hear 0% APR it gives you a false sense of savings. Whatever amount you would have paid in interest is likely to have been built into the price of the car, so in effect you are still paying the same amount, it just feels better! So, the key here is to be sure that the total price you pay for the vehicle is fair. There are some great websites out there to help you establish what a fair price is. One that I have used with great success is http://cargurus.com, but there are others. On.
The main problem with a 0% car loan is that you must buy a new car to qualify. New cars by default are almost always a poor "investment9quot; (although not by definition an investment) so you start out behind.
If you are determined to buy a new car, however, 0% is the way to go. Just be prepared to begin getting emails halfway through the loan period telling you that you "qualify9quot; to get another new car at 0% and can trade in your current "used9quot; car. That keeps the cycle of new car purchases going.
Good luck and I hope this helps!
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