Lowest Rate Auto Loans
You feel like it is time to buy an expensive car. But there is a problem - you are not a wealthy guy. There is no need to panic. These days you can get plenty of financing offers, popularly described as zero percent finance for cars. How does this work and are they really for you?
Scenario
Almost all car dealers who offer a zero percent finance,have a sales plan in place. They will have outlined a profile of the prospective customer. It requires only common sense to realise that good credit standing is a must to qualify. SO, normally such offer will be made to existing customers. New customers will be vetted on several parameters like, income, location of the customer, employment or business status, or even the assets that the customers own. Quite logically, you will be offered a shorter credit term, often below 2 years. It will result in higher EMIs - equated monthly installments.
Terms
EMIs and duration always move in opposite direction - shorter the term of credit, the higher the amounts payable per month and the longer credit period, the smaller amount to be paid per month. Incidentally, if you opt for a longer duration you will end up paying more amount simply because interest rate is induced for a long period of time. You will find that you will have paid more than 20 times the retail price. Also, failure to pay the monthly payables of the zero percent credit term will attract penal payments in the form of higher interest. In such eventuality, it will result in your paying out a far higher amount than what is required by a zero percent finance scheme. Finally, cost of the car itself is more than the one for cash payment. For example in a zero percent scenario, the car is offered at say $100,000 on display for 2 years to pay having a monthly payable amount of $4,166. The $100,000 price is actually still higher than the actual value of the car. The car dealers usually know that the car value is only say $70,000 but if offered at zero percent credit, they would price it at $100,000.
Conclusion
The zero percent finance car is a good marketing strategy for the car dealer. It is also beneficial for the customer who can afford it. From the foregoing you will wonder, and rightly so, what advantage does zero percent finance car give you the as the customer. Car dealers will almost always earn good business from this marketing strategy. It always better than paying longer credit period. And it will definitely help those who can afford the terms.
Start here - car loan bad credit friendly finance — Low Interest Auto Loans.
Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.
Comments
No comments yet.
Leave a comment