If you have been looking for a new car recently you may have noticed dealerships offering 0% car finance.
The old saying of “if it’s too good to be true, it probably is” could not be more accurate than when it comes to subvention agreements. More often than not the 0% deals will not save you any money at all.
In short. This is a three way agreement between the financier, manufacturer and the dealership that inflates the price of the car. The offers are generally only available on models that dealerships and manufacturers have trouble selling or old plated vehicles.
Remember in most cases the dealerships commission, brokerage and application fees are not included in the quoted rates. So 0% isn’t 0% at all.
Don’t forget, interest rates are only part of the story. Be sure to read all of fine print including :
- What is the balloon payment?
- How short is the term?
- What is the interest rate if you wish to increase the term?
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Mortgage Choice Knox