Zero Percent Auto Financing

An interesting sales strategy that is being marketed by dealers and lenders is zero percent finance on auto loans. Buyers are getting actively attracted to this concept as this would end up saving thousands of dollars towards interest. However, the entire concept is not as simple as it is shown. It is just a strategy that is adopted by dealer so as to attract the customer.

These sorts of loans are not available to every customer who walks into the show room. In order to qualify for a zero percent financing auto loan, there are several criteria that one requires to fulfill. The most important requirement is to have an extraordinary credit score of more than 700 without any history of bankruptcy or delayed bill payments. An average borrower has at least one bad remark in his credit history which is sufficient to make him ineligible for a zero finance loan.

Zero finance auto loans are offered only on selected models of cars. These vehicles are usually those which are not in demand or those which are showing troubled performance in terms of fuel economy or mileage or efficiency. There are even situations where the vehicle is of desired model but is not available in desired colors or does not have the desired interiors. Dealers offer loans with interest on models with all desired features.

Another interesting tactic opted by dealers while providing zero percent auto loans is that these loans are offered for a very short duration. Dealers usually fix a maximum term of 36 months before which the loan has to be repaid back. This results in paying higher monthly payments.

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