Know more about zero percent car finance deals

Zero percent car finance deal is emerging as one of the most sought after sales strategy in the UK nowadays. This would mean saving thousands of pounds which would have otherwise gone towards interest. And so, buyers are getting attracted to this conception. However, this strategy has many drawbacks and is merely a method to attract customers.

Statistics reveal that only one-third of buyers who apply for zero percent financing actually gets qualified for the loan. There are quite a few conditions that you need to fulfil.

Credit Score: Zero percent car finance deals do consider your credit report. The guidelines for credit are very severe. Bad credit history prevents you from getting the loan. These deals demand an out standing credit score of more than 700. This very credit score criterion declares one ineligible for zero percent car loans since an ordinary borrower will be having atleast one bad remark in his credit history. Zero percent auto loan, in other words, is exclusively safe guarding the dealers’ interest. More are liable to get excluded than to get included, so far as these zero percent loan deals are concerned.

Select Models: As the name itself reveals, these loans are applicable only on a few selected models of cars. The pitfall comes again at the fact that, these selected models are usually those which are not in demand or those which have a poor performance so far as fuel economy, mileage or efficiency is concerned. Sometimes vehicles may be available in desired models. But colour and interior designs may fall short of your conception. Even at this point, the dealer will be happily offering you a vehicle with all your preferences. Don’t fall into that trap. For what they offer you then will be anything but a no interest car loan deal.

Short Duration: Dealers providing zero percent car loans usually assume another interesting tactic- specify shorter loan terms. A maximum term of 36 months is usually fixed by these dealers where as a typical buyer prefers to finance a vehicle for 48 to 72 months. Obviously this paves the way for higher monthly installments. It’s true that no interest is charged. But the hidden fact is that the monthly payments will be higher owing to the shorter duration. This makes most borrowers feel that it's better to pay interest in order to keep the payment reasonable. After all, normal installment rates are goddamn better than a treacherous no- interest option.