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The zero percent car loan myth

Posted 12th November, 2014 in Finance Tips

If you’re in the market for a new car, you have probably come across some quirky advertising during your research to say the least.

In an effort to gain your attention and get bums on car seats at the dealership – there has been a noticeable increase in the advertisement of 0% interest car loan.

0% car loans – too good to be true?

We’re glad you asked, but we have some bad news. Yes, zero percent car finance exists but it doesn’t exactly benefit the buyer (that’s you!).

If you were to take out car finance at zero percent, you will most likely miss out on any opportunity to negotiate the price of your car. After all, the dealer has to make some profit on the RRP of the vehicle. Sounds a little backwards doesn’t it?

Tips for negotiating zero percent finance

Focus on the long-term cost of paying market rate finance for a car that you have negotiated down to a more comfortable price, rather than the lure of paying 0% interest on a vehicle with a higher RRP.

You might be surprised to learn that you’re more likely to save your hard-earned money in the long-run, if you take out market rate finance on a vehicle that you have successfully negotiated down to a more comfortable price.

Word to the wise

It pays to shop around for a car loan that is catered to your personal circumstances and financial history.

To find out more information about getting great value finance that works for you, talk to one of our friendly, expert NuStart Finance consultants by completing an online finance pre-approval form, or calling 1300 883 983 today!

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