Zero percent car finance ... too good to be true?

Have you ever wondered about discounted car finance offers that are currently available at various car dealerships. In some cases the dealerships are offering car finance interest rates from as low as 0% to 3.5%.

How do they do it? The truth is that taking up car finance at a car dealership may adversely impact your ability to negotiate the price of your next new car.

Here are some of the pitfalls that you should be aware of if you are contemplating purchasing a new car at a dealership under a discounted finance offer.

Terms and conditions
Zero percent interest rates offered by car dealers are often subject to a broad range of terms and conditions. 

Inflated car price
 
In many cases, if you walk into the showroom and ask for a 0% car finance deal, the price of the vehicle can be inflated and is often not negotiable – you are paying full retail pricing for your new car. You can almost certainly negotiate a better price with the dealer if you’re not asking for the 0% finance option

Restrictions 
Discounted finance offers are generally only available on a limited number of vehicles at the dealership. In some instances, car dealers wanting to clear vehicles from the showroom floor or runout excess stock will use discount finance offers to make the vehicle seem more enticing to the customer

Trade In Value 
If you’re trading in an older vehicle, you are likely to be offered a much lower price than if you weren’t opting for the 0% finance deal. Consider selling your vehicle privately instead if this is the case.

Lack of flexibility
The structure of the finance is also often less flexible, such as the term of the deal, balloon payments, and deposit requirements from the customer. Dealers will typically require a significant deposit before entering into this kind of loan.

Reduced loan terms 
0% finance contract is often offered at shorter finance terms as dealers want you to pay off the contract faster. In many case this means higher repayments (depending on your deposit or balloon).

Selected models 
This finance normally doesn’t apply to all dealerships. If you have your heart set on a particular model, you might be disappointed to find that the 0% deal isn’t available.

Getting a better deal on your car finance

Most dealerships often only have access to one retail lender to source your car finance. At Partners Wealth Group our lending advisors specialising in Asset Finance have access to a large lender panel of over 20 lenders. We’ll navigate the market to find the right finance solution at the most competitive interest rate, tailored to your specific needs. 

Contact Partners Wealth Group today on 1800 333 143 to see how we can help you get a great financing rate on your next vehicle.