Zero% Financing On New Cars For Sale – Reality Or Myth?

If you are browsing new cars for sale for sometime, you must have heard about 0% financing. It sounds incredible. True. It's a relatively new concept. Also true. However, there are some conditions in place for you to qualify for a 0% financing. Those conditions are pretty inflexible.

The concept of the financing is pretty simple though. It goes like this: you can buy a car from the company by putting a down payment. The company provides you with a loan and makes the car the collateral. It's completely interest free. There is no APR (Annual Percentage Rate) to pay. BUT, there is a small catch – you will have to pay the loan transaction fee, generating fee and processing fee. Not only that, you are also supposed to pay late payment fees and other fees that are related to installment payment are also imposed.

You need to have a good credit score or rating to be eligible for a 0% financing. These days, the financing is offered by either the manufacturer even. So, depending on which manufacturer you are dealing with, the right credit rating could be in the range of 650 to 750. Keep in mind that more expensive the new cars for sale, greater the credit score requirement.

Other than your credit rating, you also have to present the proof of regular income. A steady job or a business are considered to be sources of regular income. The company that gives you the loan reserves the right to lien on the car until you repay the full price of the car. If it is not paid, the car will be taken from you because it is the collateral.

So, be careful before choosing a 0% financing on new cars for sale.