Compare car loans with Quick Car Finance
- Get a decision in minutes
- Won't affect your credit score
- No deposit options
When shopping for a new car, you’ll come across dealers advertising car loans with an extremely low interest rate — sometimes even 0%. This type of dealership loan is generally a sales tactic.
Before signing on the dotted line and driving off the forecourt, there are some things you need to know about taking on a 0% car loan.
Warning: late repayments can cause you serious money problems. See our debt help guides.
At first glance, a 0% car loan is exactly as it appears, you purchase the car at the agreed price, and then make monthly payments on the price of the car with no interest. However, keep these points in mind:
There are different reasons why dealerships offer zero interest. One reason is to get potential buyers in the door. Once a buyer has entered into a salesperson’s territory, the sales battle has begun.
Another reason is to move inventory. By offering a 0% car loan, they can get rid of the cars that have been on the forecourt too long, and make a profit — even without interest.
If you make all of your payments on time and get a competitive price on the car, it can be. However, 0% car loans tend to have shorter terms, resulting in higher monthly payments of a few hundred pounds.
But if you’ve been approved for a 0% car loan from a dealership, odds are good you have great credit. You’ll probably be able to get competitive deals with a different lender.
When it comes to car finance, there are a number of options with 0% loans that may work in your favour. When comparing loans, consider:
There are few strategies to use when buying a car with 0% financing that can help you use your loan as efficiently as possible, they are:
Before you lock yourself into 0% car loan, research banks and other lenders to see if they can offer you a car loan with terms that are more suited to your financial situation.
We’ve reviewed the best stocks and shares ISA in the UK and explained who they’re best suited to, with pros and cons.
Want to know what capital gains tax is, how it works and when you need to pay it? Read our comprehensive guide on what you need to know about capital gains tax including what your CGT allowance is for the 2021/2022 tax year.
Find out which insurance group the Volvo V60 falls under and how much it costs to insure.
Find out which insurance group the Chrysler Ypsilon falls under and how much it costs to insure.
Find out which insurance group the Lotus Elise falls under and how much it costs to insure.
Find out which insurance group the Volkswagen Bora falls under and how much it costs to insure.
Find out which insurance group the Skoda Roomster falls under and how much it costs to insure.
Find out which insurance group the Peugeot RCZ falls under and how much it costs to insure.
Find out which insurance group the Smart Fortwo falls under and how much it costs to insure.
Find out which insurance group the Kia Sedona falls under and how much it costs to insure.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.