QThe Pontiac Dealer In My Town Is Advertising 36 Month, 0% Auto Financing For New Car Loans. It Seems Like I'd Be Getting Something For Nothing. What's The Catch With These Loans?
AWe're talking about car dealerships; why would there be a catch? Okay, back to realityÅ The first catch is that a very small percentage of people will actually qualify for these loans. Dealerships are smart. Advertising 0% auto financing is a great way to get car buyers into the showroom, but then many buyers are surprised when they find out that their credit scores or their employment history or income amounts just aren't good enough to qualify them for that offer. Of course, the dealer has a higher-interest loan that he's more than happy to slide you into. Then there's also the fact that you can be pretty sure that the 0% offer doesn't apply to all of the cars on the lot; rather it probably just applies to the models that are less popular and harder to sell. If you are one of the few who have a spotless credit history and you want the model that the financing is being offered on, you'll want to make sure you're not giving up a rebate that could be put to better use and saving you more money. Oftentimes if manufacturers are offering a rebate at the same time that they're offering low or no-interest financing, it's an either/or situation and you can't have both. If you're sure that the 0-interest financing is the way you want to go, be sure you can afford the monthly payments. Since the payments are usually spread out over just 36 months, they can be quite high, even at 0-percent interest. For instance, a loan of $18,000 paid out over 36 months means monthly payments of $500 a month. So while it's not impossible to take advantage of the offer that your Pontiac dealership is proposing, you'll want to pay close attention to the above so you're armed with knowledge when you enter the dealership showroom.