The Truth About 0% Financing
You see it everywhere—auto dealerships advertising 0% financing on new cars. It sounds like a dream come true, but is 0% all it’s cracked up to be?
 First you have to actually get the advertised rate. Most of the time, only people with perfect or very near-perfect credit qualify for a 0% auto loan. According to a recent survey, only about 15% of consumers who shop for 0% financing actually receive it.
The term on a 0% loan is often much shorter than the terms offered by your credit union. Usually, the rate comes with a 24 or 36-month term, which can result in higher monthly payments than you want or can afford.
0% financing is not always available on the car you’re looking for. Dealerships will slap the offer on slow-selling models in an attempt to move a few extra units. Is the vehicle you want available with 0% financing? If it is, you may want to do some research as to why the model you’re looking at isn’t selling.
You generally can’t get rebates or negotiate the price of the car with a 0% offer. It’s either-or. In many cases, you can save money by getting a cash rebate and financing your auto through the credit union. Take the example below, assuming a $28,000 sticker price on a new auto (and a 48-month term on the 0% rate, which you won't usually find anyway):
| Dealership | REGIONAL |
| Loan Rate | 0% | 5.70% |
| Term | 48 Months | 48 Months |
| Price of New Car | $28,000 | $28,000 |
| Down Payment | $3,000 | $3,000 |
| Dealership Rebate | $0 | $3,000 |
| Total Loan Amount | $25,000 | $22,000 |
| Monthly Payments | $520.33 | $513.65 |
| Repayment Total | $28,000 | $27,655.20 |
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