The Reality Behind Zero Interest Auto Loans |
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Low and zero-interest rate
auto loans offers from automakers are becoming more attractive, due to the rising interest rates on other lenders' car loans. So, the era of free money to finance your new car, the 0% auto loans offered by manufacturers, isn't over as yet. The appeal of zero interest auto loans lie in all the money you think you'll save. But, if your car dealer is the middleman for another finance company, your 0% interest auto loans can become expensive. The points the dealers lose on low or no interest loans will be made up by raising the price of your car to the MSRP and or adding all kinds of lame fee's. However, if your 0% interest auto loans are offered by the car manufacturer itself, it won't cost you anything extra. Obviously the rule applies only to 0% interest car loans. Anything else and you're fair game. Studies have shown that fewer than 10% of those that apply for 0% interest auto loans actually get approved. The reason is that their credit score isn't high enough. Studies have also shown that the small percentage of new car buyers that do get approved for 0% interest auto loans don't bother to negotiate a lower price on the car. Why? The psychology is that they feel that they are getting something for nothing so they don't want to come off as greedy. However, if you do get approved for zero interest auto loans then you will usually find them to be for short terms of maybe 24 or 36 months. As a result, your payments will be really high. Also, there are no dealer rebates with 0% interest auto loans. Some dealers might even limit 0% interest auto loans to select models. Also, there is no guarantee that the sales person won't try and squeeze you for more money somewhere else during the deal. However, you must have a credit score of at least 680 to get 0% interest auto loans. You can get your credit report and credit score from True Credit and Equifax and check it before hand to see if you qualify for one. Negative information on your credit report, that you weren't aware of, will cost you more money because you will then, only qualify for higher interest auto loans. The other thing is car dealers frequently lie to you about what's on your credit rating. So it's best to take your credit rating with you. And, a dealer's auto loans department is not the place to get carried away and make hasty emotional decisions. But that is what they are counting on. So, if you go there, unprepared, you will end up so confused and burned out that you will eventually sign away anything, just to get the deal done with. It's all part of the process. If you're like most of us and you don't have an extremely high credit score and/or you cannot afford the short-term auto loans with high monthly payments and/or the dealer isn't offering this loan with the type of car you want, here is the solution, online auto loans. So, the best way to avoid all the high-pressure tricks that happen in the finance department of a car dealer is to go online for auto loans. It's also how you can avoid the new auto loans markup scam. If you have good credit, it's a fast, easy and painless way to apply for a new car loan. |
