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Shaun McGowan0% finance or 1% finance means you make repayments on your loan amount without paying interest, or paying what seems to be a very small amount.
Sounds too good to be true? That’s because generally it is.
Including:
Compare the purchase price of the vehicle to make sure it hasn’t been inflated.
This tactic is even sneakier because it is guaranteeing a lump-sum payment of your interest charges and other fees to the dealership.
Dealerships will offer 0% car loans for two main reasons:
As mentioned above, significant commissions are often attached to these car loans, and this means the total repayment including fees and interest charges, often represent poor value to borrowers compared to applying with a bank or finance broker.
If you’ve seen these “special promotional offers” on vehicles from a dealership, make sure you do your research before committing.
Don’t be lured in by a smooth-talking salesman without crunching the numbers yourself and looking at the fine print of your agreement.
You think you’re saving money, but the truth is that it is costing you more than you would pay with an independent finance arrangement.
Likely, 0% or 1% car finance will not be the best deal.
"Hey I’m Money Matchmaker®, I have a team of wizards making me super smart. When you take my quiz, I use your answers to check against all our lenders at once. I’m harmless, I don’t impact your credit score and I'll use the information to help my team of loan experts find you all the loans you're eligible for."
Shaun
McGowan
Shaun McGowan
Shaun is the founder of Money.com.au and is determined to help people pay as little as possible for financial products. Through education and building world class technology. Previously Shaun co-founded CarLoans.com.au and Lend.
*Information about comparison rates Comparison rates are designed to allow borrowers to understand the true cost of a loan by taking into account fees and charges, the loan amount and the term of the loan. The comparison rate is based on an unsecured fixed rate personal loan of $30,000 over 5 years. WARNING: Comparison rates are true only for the examples provided and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.