0% finance deals may sound like a great idea, but they’re not always everything they’re cracked up to be. Here are some of the common catches to be on the lookout for.
Let’s keep it real – 0% finance deals are designed to get you into a showroom, not to give you a great deal. So you shouldn’t be surprised to find they often only apply to less popular models or those about to be replaced by a newer version. They’re also usually only available for a limited time, allowing salespeople to pile on the pressure while restricting your freedom of choice.
Although 0% finance deals state they’re ‘interest free’, the reality is somewhat different. Finance providers still need to make money, so instead of spreading the interest over a set number of repayments, they factor it into the upfront cost of the car. Consequently, you’ll find dealers won’t be flexible on the price of the vehicle or provide a particularly generous trade-in, meaning you pay more than you need to.
As well as being available for a ‘limited time’, 0% finance deals are often spread over a shorter period (3 years is pretty average). The result? Your monthly repayments may be higher than they’d be with a longer-term loan and higher interest rate. The structure of the finance may also be less flexible, giving you little (if any) room to move when it comes to loan terms and balloon payments.
Talk to the experts
To avoid finding yourself in a sticky financial situation, talk to us first. With access to over 30 reputable lenders, we can have your pre-approval done and dusted within 24 hours. Whether you’re buying through a dealer or private sale, we can find the finance that’s perfectly suited to your needs, giving you more time to find your dream car, and less time worrying about how to pay for it. Give us a call today to get started.