The truth about 0% car finance

May 02, 2017
Lisa Elliott

Offers of zero per cent interest on car finance may sound tempting, but it pays to read the fine print, because deals that sound too good to be true usually are.

Many car dealerships offer 0% p.a. interest car finance, which may sound like a great deal but before signing up, there are a few things you should look out for.

If a loan is being advertised with a 0% p.a. interest rate, the purchase price of the car may have been increased to compensate.  This can mean there is no room for negotiating a better price with the dealer.

Usually, offers of 0% p.a. will apply to certain models in a range.  So if you really wanted a particular model not part of the 0% p.a. offer then you may find yourself having to compromise.

It's important to look for any clauses in the sale contract, like servicing the car regularly at a specified dealership to maintain the warranty.  These service costs may be higher than you would pay at an independant mechanic.

Insurance and the vehicle warranty should also be checked, so you know what you are getting for your money, and you are not paying for something that you don't need.

The best thing you can do is your homework.  Shop around and read the fine print before signing.

At Mortgage Choice I have access to a range of vehicle finance providers and car buying services and will help you to compare your options.  

We can even help you secure loan pre-approval and if you know the vehicle you want, then why not take advantage of our car buying service.

 

Posted in: Car loans & leasing

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