Posted on October 18, 2019 by Rutul Shah
0% Financing On New Cars In Mississauga, Ontario, Canada
Thinking about buying a new car? Your search in Mississauga and area has likely included seeing a lot of low-interest special offers and incentives from a wide variety of automakers. There’s one offer that seems to come up pretty often: 0 per cent interest. But can you actually finance a car and pay no interest at all over the term of the loan? Is it just too good to be true in the GTA?
When you apply for a car loan, you're borrowing money in order to pay for a car. Simple enough, right? But banks don’t usually hand out money for free. As you probably already know, interest is a fee that you pay your bank on top of any loan. Now, in the case of 0 per cent loans, you pay no interest. You’re borrowing money without paying a fee for doing so. A zero per cent arrangement lets you pay the same amount of money a cash customer would. The payments are simply spread out over a longer term. And it’s possible because in most cases, it’s the automaker, not the bank, doing the lending.
How? The automaker still makes money with a 0 percent deal. The amount earned on any car deal is the same, with the money earned over a longer time-span. The money isn’t made from the financing but rather, on the car itself. Zero per cent deals are most often legit. What can be frustrating to realize is that zero per cent financing is often difficult to qualify for. Many car-buyers jump at the incentive, then come up against this disappointment. Oftentimes, unless you have the highest credit score possible and a lengthy credit history, zero per cent interest deals aren’t likely available to you.
If you’re a shopper with average credit, you may find that you don’t qualify for zero per cent incentives. Still, it’s best not to assume that you will or won’t qualify for zero per cent financing until you actually visit the dealership. The higher interest rates that you may be offered by the dealer or automaker at that point aren’t a scam. The fine print may have specified different qualifying requirements.
Follow a few simple steps. First, confirm that the rate is available through the dealership. Then, take the car you’re interested in for a test drive and negotiate a good price with the salesperson. The dealer will examine your credit history to determine whether or not you qualify for 0 per cent financing. Should you not end up qualifying for zero per cent financing, backing out of the deal isn’t the only option. Be sure that you’re comfortable with the new rate offered or, if it's too high for your budget, know that you do have a couple of other options. Check out other dealerships to compare numbers with, or visit a bank to see if you can get them to provide a better rate. It’s often a good idea to sit down with a salesperson at the dealership to get the facts on qualifying so that you can make an educated purchasing decision.