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    0% Car Loan: Is It Possible?

    0% Car Loan: Is It Possible?

    Getting a car loan with 0% APR loan might seem impossible, but it is actually achievable. Moreover, buyers should definitely opt for it whenever possible given that over the life of the loan, you could save a considerable amount of money. 

    Still, before walking to the car showroom and discussing a 0% APR car loan with the salesperson, make sure to check your credit report given loan eligibility often depends on a strong credit score. 

    How Can It Be Zero?

    To increase the selling number of a specific vehicle, the automaker's financing agencies decline the profits that they could make from interest on an approved car loan. Oftentimes, this is part of a strategy to clear out the stock of low-selling vehicles and create space for the newly manufactured models. The 0% interest rate on car loans is usually offered during summer months to increase the sales and clear the inventory of older car models by the end of the year.

    On the other hand, in some cases, dealerships intentionally offer their own 0% APR car loan. They often choose not to incorporate interest in a loan for two big reasons. The first reason is to stimulate sales of some selected car models, or second, to receive a large down payment amount from buyers. Still, buyers need to qualify for these special loans.

    Bonus Cash Vs Zero Percent Loan

    Bonus cash and zero percent loans are two common terms that shoppers usually come across while purchasing a car. Bonus cash is generally a good choice to opt for, but when compared to a zero percent loan, the cash amount must be adequate enough to compensate for the difference in interest. 

    For instance, if you are purchasing a car worth $30,000 along with a down payment of $3,000, you are more likely to be qualified for a car loan. At that time, you might be provided with two options: a zero percent loan that has no extra discount or a bonus cash incentive. 

    However, you would require having an incentive that keeps the total repayment amount with interest below the 0% APR car loan offer. If the bonus cash incentive is below the amount that a 0% APR loan would save, then the zero percent car loan will be suitable to pick. To estimate which one will be better for your investment, you can use an online loan calculator.    

    The Steps

    Zero percent car loans are undoubtedly a great option for buyers. Yet, there are a few steps that you need to take to ensure eligibility such as checking your credit score. Keep reading for more insight into the steps below. 

    Look for 0% APR After Negotiating Car Price

    You can only get the 0% APR loan from car manufacturers given credit unions or banks have no say in it.  Therefore, you need to find car companies who are offering a 0% APR car loan facility. Car manufacturers often promote this loan type on their official websites. 

    Thus, you can easily find whether your desired car brand is offering any loan by simply visiting their incentive page. However, even if car manufacturers grant a zero percent auto loan, it usually only applies to certain conditions. Once you have come across a 0% APR loan on your desired car, talk to the car dealer and try to negotiate the best deal before talking about financing the purchase.  

    Check Your Credit Score And Reports

    As mentioned earlier, credit scores matter a lot in order to get the loan. This type of incentive is only provided to buyers with strong credit scores. You must be aware that your credit score is calculated according to the data contained within your credit report. Thus, ensuring that everything is correctly entered in your report is important for ensuring eligibility for the loan in the first place. 

    If you find any error in your credit score while checking, you should immediately eliminate the error before applying for a zero percent car loan. Make sure to check your credit report from the three key credit bureaus - Experian, Equifax, and TransUnion. After verifying your credit report, put your focus on the score. The minimum credit score that you will require for this type of loan is 700 and higher depending on the manufacturer and deal. 


    Getting a car is one of the most emotional moments for a buyer and it can be even better with a zero APR car loan. Considering this type of loan is beneficial given you will not face interest costs over the life of the loan. By making careful use of the steps outlined above, you can improve your ability to access the best available financing deals.