Like any great deal, a 0% dealer financing offer usually has a catch. The New York Times reports that only
about 10% of consumers actually qualify for 0% interest loans, which require
pristine credit—usually a FICO score of 720 or higher. And the loans typically
are reserved for a limited number of models and are not available if you're
shopping for a used car, which obviously tend to cost less than newer models.
These
0% loans often are paired with shorter-term loans, which cost you less overall
but mean a higher monthly payment.
Before
you head to the dealership, keep these points in mind:
Look at All Available Deals
Check
for other offers, such as cash back. If you can get a rebate—which lowers the
overall price of the car—paired with a low-interest loan, it may save you more
than the 0% financing. So be sure to crunch the numbers. You can find a number
of online calculators to help you, like this
one.
Negotiate the Price
Before
you get to the interest rate, finalize a sale price and stick to it. Once the
sale price is established, then talk about financing.
Get Preapproved for a Loan at your Credit Union
Heading
to the dealership with a firm offer in hand will give you a point of comparison
and puts you in a stronger negotiating position. Credit unions, as
not-for-profit financial cooperatives, offer competitive rates.