0% Car Finance Deals
An interesting sales strategy that is being adopted by dealers and lenders nowadays is zero percent finance on car loans.
Buyers are getting attracted to this concept as this would mean saving thousands of pounds which would have otherwise gone towards interest. However, this strategy has many pitfalls and is merely a method to attract customers.
Statistics reveal that only about one-third of buyers who apply for zero percent financing actually qualify for the loan. These loans are not available to every customer. There are several criteria that you need to fulfil.
Credit Score: These deals take your credit report into consideration and the guidelines for credit are very demanding. You need to have an extraordinary credit score of more than 700 without any history of bankruptcy or delayed payments. Usually, an average borrower has at least one bad remark in his credit history which makes him ineligible for a zero percent car loan.
Select Models: These loans are applicable only on a few selected models of cars. The selected models are usually those which are not in demand or those which have a poor performance in terms of fuel economy or mileage or efficiency. Often, this is the dealers attempt to get rid of such vehicles. There are even situations where the vehicle is of the desired model but is not available in the desired colour or does not have the desired interiors.
Short Duration: Specifying shorter loan terms is another interesting tactic that is adopted by dealers providing zero percent car loans. Dealers usually fix a maximum term of 36 months before which the loan has to be repaid back. Typically most people prefer to finance a vehicle for 48 to 72 months. Shorter duration results in paying higher monthly payments even if no interest is charged.
So, the next time you decide to go for zero percent car finance, do not assume that it might be the best deal available. Instead, check out other car financing options because informed buyers are always the best buyers.