Is 0% Auto Financing The Best Deal?

If you're getting ready to buy a new vehicle, you’ve undoubtedly seen dealerships advertise 0% financing. But before you jump at what seems like such a great deal, take the time to get a closer look at the fine print before you sign on the dotted line. In many cases, a low-rate auto loan combined with the manufacturer’s rebate is often a better deal than 0% financing. Get the facts before you make the deal.

  • 0% financing offer may be for a limited time only. If you can’t pay back the money within the allotted time, the money you thought you were saving up front might end up costing you more in the end.
  • Generally, buyers must forfeit the manufacturer’s rebate if they choose the 0% financing offer.
  • Buyers with less-than-perfect credit usually do not qualify for 0% financing.
  • 0% financing is usually reserved for select vehicle models. 
  • If a buyer has one late payment with 0% financing, it may cause the interest to be retroactively to the start of the loan.
  • The purchase price of the car may be higher with a 0% financing offer to make up for the loss of interest.
  • Buyers may not be allowed to finance the sales tax and DMV costs with a 0% financing offer. 
  • Many 0% financing offers are restricted to shorter terms. This can cause your monthly payments to be much higher.

If you choose to finance through a credit union, like Orange County’s Credit Union, there are loan options for a wide range of credit history and terms up to 84 months. Plus, you might be eligible for a dealer rebate. Use this calculator to help determine which is the best option for you.