What new car 0 finance deals mean
It’s time to change your wheels and there are attractive offers at the dealership on new car 0 finance deals too good to pass up. Maybe, it’s time to change your old clunker or upgrade to a roomier car to transport the entire family back and forth. But, before you do this, make a little research as to what this implies making sure that there are no hidden costs that will surprise you in the end.
What new car 0 finance means
Put simply, new car 0 finance or 0 APR (annual payment rate) means that a car or vehicle buyer does not pay an interest rate on loans applied towards a new purchase. Dealerships often do this to attract buyers to get a new vehicle or to dispose stocks of older models.
However, there are several conditions before you can get this deal, the first one of which is to establish your credit worthiness. If you are an eligible client, then you just have to pay the amount of the total purchase cost of the car under a fixed or pre-determined period.
An easy example is when you are buying a car worth £30,000 to be paid within 24 months or 2 years. Hence, you have to pay an amount of £1250 monthly. No interest is paid on the principal of the loan. Defaults may carry penalty charges depending on the terms set forth in the loan agreement or contract.
Best deals to consider
We scoured the web and here are some interesting finds:
- Toyota offers 0% APR on several models such as the Yaris Edition, Aygo Fire, iQ, and Verso TR with monthly payments ranging from a low of £119 to a high of £259.
- Mini has an interesting offer too, but it differs in a sense that you need to put up 50% of the total price cost with the remaining balance to be paid over a specified time period or hand back the car. This seems more like a lease than a new car 0 finance deal. There’s also another offer with £189 monthly payments spread over 48 months and a £4,000+ deposit or down payment.
- Vauxhall also offers this scheme to customers who wish to buy new cars. There are several restrictions though as to what type of car is eligible for this type of financing, so it’s best to look at the finer print.
Study the deal carefully
The new car 0 finance deals on offer are certainly enticing and can save a lot of money. If you do have the cash to pay up front the required deposit, this makes it easier on your chequebooks to make those monthly payments. However, be aware of pitfalls in contracts and double check if a new car 0 finance deal is exactly what it says. Consult a finance specialist or solicitor to explain the nitty gritty of all these legal terms and the implications to you as a buyer.