There are many pros and cons to zero percent auto loans. They help the people with money and perfect credit. One of the cons is they are hard to qualify for.
Zero percent auto loans are used by car dealerships to intrigue people to come to their car lots. When most people hear zero percent they want to take advantage of the opportunity.
There are a couple of things that you have to have to qualify for a zero percent auto loan. One is you have to have a perfect credit score. Another is you are required to have a large down payment. The down payment required could be as high as 25 percent.
This is a great tool for the dealers, because once you are informed that you do not qualify for the loan you have already test drove and fallen in love with your dream car. It is then easy for the dealer to convince you that you can live with the low interest rate that he/she is able to give you.
When one is dealing with zero percent interest rates they need to careful, because in some cases you could go to another dealership and find the car that suits you at a better cost, even with interest it could cost less. It is important to shop around before making your final decision.
Another thing about zero percent auto loans is most dealerships will only have the loan on certain cars. If you dont like the color of the body, interior, or whether it is leather or material, the dealer would be more than happy to show you the car that is more of what you want. Unfortunately you will not receive a zero percent auto loan on that particular car.
The type of cars that the dealer will usually offer the zero percent auto loans on is cars that are slow. The shoppers will most likely not want to buy these particular vehicles. This helps the dealer to sell the vehicles with loans that have an interest rate.
Now there is a good side to a zero percent auto loan if the buyer has the money for the down payment. The buyers credit score would still have to be perfect if there is even one blemish on their credit they would not qualify for the loan.
In situations like mentioned above zero percent auto loans would be ideal. In that scenario the buyer would actually save money. It is very rare that any one would actually be able to receive this offer and want to take the car that it is attached to.
Another con to zero percent auto loans is that normally the monthly payments are a lot higher then an auto loan with an interest rate. If the buyer is able to pay a higher payment then they could have their car paid off in 3 years.
The best thing to when buying a vehicle is to do your homework, make sure you are finding the best vehicle that suits you. Also make sure that your loan payments are within your budget.
