One of the strongest marketing tools used in new car sales today is 0% auto financing. Consumers have learned correctly that a major part of the cost of a car purchase is the financing cost. In a typical new car costing $20,000 to $30,000, a 0 percentage car loan can equate to a savings of thousands of dollars over the life of the loan as well as have a noticeable impact on the amount of money paid out monthly. It is not surprising that 0 percent car financing has been increasingly used to drive sales when new models are introduced, at year end to clear out inventories and during a period when there’s a slump in sales.
As one may expect, zero percent auto financing is generally only available to those with good and excellent credit. This is understandable since both the dealer and the manufacturer are foregoing a significant amount of their total profit when this is offered. Those with poor and bad credit find they rarely qualify and when trying to buy the same cars are faced with traditional interest rates.