Best 0% APR Financing Deals Right Now

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And signing off on a 0 percent APR car deal is one way to save money on your next car purchase. Numerous automakers offer interest-free auto loans to attract new, well-qualified customers and sell more vehicles. However, when shopping for a new vehicle, you should always proceed with caution, even if a zero APR offer is on the table.

In some instances, getting an auto loan from an outside lender might work out better in the long run. A 0 percent APR or interest-free auto deal essentially means you borrow money for free. This differs from the usual approach when you take out a vehicle loan where the lender charges you interest in exchange for financing. Interest and fees, after all, are the primary ways that lenders make money. As you repay the loan, you reimburse the lender for the money it paid the auto dealer on your behalf.

The interest you pay helps the lender earn a profit. Financing a car interest-free almost sounds too good to be true. But these financing deals are a tool that auto manufacturers can use to sell more vehicles. Go for an older car and the savings are likely to be substantially higher. If you\’re open to going used to get the most affordable car finance, have a look at some of the used car finance deals available now on BuyaCar.

This offers affordable monthly payments, as these only cover the amount of value the car is expected to lose over the contract, rather than its whole price. At the end of the contract, you can either return the car to the finance company, or buy it for a pre-agreed optional final payment.

Another potential option is Hire Purchase HP , which ends in you owning the car once you\’ve made all the monthly payments.

Because there is no large optional final payment, monthly payments are a little higher with HP than with PCP, since you have to pay for the entire value of the car through the monthly payments. This also means that you don\’t need to find many thousands of pounds to pay off that large final payment if you want to take ownership, though you are able to refinance this into another finance contract, should you wish. Meanwhile, if you\’re after the best value option and are happy to consider a nearly new or used model, you can kickstart your car finance journey with BuyaCar to see how much you can afford to borrow and find a great deal among thousands of used cars currently available now on our search pages.

However, the used car finance industry is competitive, which keeps interest rates low. Some retailers, including BuyaCar, work with several lenders to ensure that you get a competitive quote for your circumstances, along with a good value cash price to begin with – which means you might be able to get more car for your monthly budget than you might expect.

That can be the case even where there is a really good new car finance deal on offer, so as always, it\’s worth getting a couple of like-for-like quotes to find the best car you can get for your budget.

Alfa Romeo Stelvio Quadrifoglio. BuyaCar prices Limited stock. Jeep Wrangler. Used deals Limited stock. Renault has a long history of offering interest-free credit agreements. SsangYong is best known for its rugged off-road vehicles. Two of its smallest models are also available for interest-free HP agreements, which can be spread over three years. In addition to application details, financial lenders will use information from credit reports to determine whether to accept the finance application.

Free credit scores can be accessed from companies such as Experian , Equifax and Transunion to give a rough idea of how likely lenders are to offer finance. Young drivers may find it more difficult to be accepted for finance unless they have a strong credit history, as lenders are unable to determine the ability of a customer to make repayments.

However, this is not always the case.

Zero apr cars – zero apr cars.0% APR Car Deals: Are They Worth It?

Each lender also has its own definition of excellent credit, and qualification requirements could vary from vehicle to vehicle. Because zero APR qualification standards vary so widely, your best bet is to call the auto dealership in advance. Ask what criteria you need to meet to qualify for interest-free financing on a specific vehicle. Aside from your credit score, an auto lender may consider additional factors when it reviews your application, such as:. Regardless of the condition of your credit — good, bad, fair or excellent — you should take the time to seek preapproval from outside financing sources as well.

Interest-free financing might be a great deal for some borrowers. Still, there are a few potential pitfalls you should look out for when considering this type of financing. Automakers want you to purchase your next vehicle from their company, not a competitor. This is a key reason 0 percent financing offers exist in the first place.

In the same interest of attracting new customers, auto manufacturers often offer bonus cash rebates to buyers. Sadly, an auto manufacturer might not let you take advantage of both 0 percent financing and bonus cash. Bankrate tip: Using an auto finance calculator can help you compare apples to oranges when it comes to 0 percent financing versus bonus cash incentives. Sometimes taking the cash rebate an auto dealer offers along with a higher loan APR will make the most sense as far as overall savings.

In other instances, 0 percent financing might be the clear winner. Depending on your situation, refinancing your new auto loan in a few months might be an effective strategy. But there are some downsides to consider first. Namely, taking out two auto loans back-to-back — the original and the one you refinance it with — could harm your credit for a while. Multiple loans will result in at least two hard credit inquiries on your credit reports.

Adding two loans to your credit reports, even though one pays off the other, can reduce the average age of accounts on your credit reports. In terms of credit scoring, the older the average age of your accounts, the better. It might make sense to forgo special manufacturer financing offers in the following situations.

Low-interest car loans often come with shorter finance terms. Depending on your income, a shorter loan term could make your monthly payment unaffordable. For example, if the 0 percent car loan lasts for four years in instances when you would typically finance for five years, the cost difference can be meaningful.

You can use an auto loan calculator to do the math for your prospective loan. Financial experts often recommend keeping your monthly vehicle payment to 20 percent or less of your monthly take home pay. And some experts suggest that you cap your car payments at 10 percent of your gross income. The key to deciding if a 0 percent APR car deal is worth it for you is to compare it against an auto loan from an outside lender and find your true monthly cost.

Depending on your circumstance, the deal may not truly save you money. How We Make Money. Michelle Black. Written by. Michelle Lambright Black is a credit expert with over 19 years of experience, a freelance writer and a certified credit expert witness. In addition to writing for Bankrate, ….

Edited by Rhys Subitch. Edited by. Rhys Subitch. Rhys has been editing and writing for Bankrate since late They are passionate about helping readers gain the confidence to take control of their finances by providing clear, ….

Share this page. Bankrate Logo Why you can trust Bankrate. Bankrate Logo Editorial Integrity. Key Principles We value your trust. Bankrate Logo Insurance Disclosure. They are worth it if you save money on your monthly payments. But you need excellent credit to qualify.

Keep both its cost effectiveness and your eligibility in mind when going for a test drive. Loan Auto. Cash incentives can lower the amount you have to borrow — but refinancing it later for a better rate can cause your credit score to take a temporary hit. Read more From Michelle. You may also like How to evaluate an auto rebate. Should you take a rebate or 0 percent financing? It is simply Personal Contract Purchase or Hire Purchase without the interest, and is only offered in certain circumstances.

Customers will need to consider whether Personal Contract Purchase or Hire Purchase is more suitable for their requirements. In addition to application details, financial lenders will use information from credit reports to determine whether to accept the finance application. Free credit scores can be accessed from companies such as Experian , Equifax and Transunion to give a rough idea of how likely lenders are to offer finance.

Young drivers may find it more difficult to be accepted for finance unless they have a strong credit history, as lenders are unable to determine the ability of a customer to make repayments.

However, this is not always the case.