Zero percent financing can be considered nothing more than a very clever marketing scheme that is so misleading it borders on an outright lie.
Here are some hard facts about zero percent financing that they don't mention in the advertisements:
Less than a ten percent of all consumers qualify for zero percent financing. Your credit rating has to be gold-plated750 or aboveand you need a certain amount of income to qualify. Out of those who do attempt to pay back a zero percent financing loan, only about 10 percent close the deal successfully.
Substantially shorter loan periods and zero percent financing come hand in hand, usually no more than 24 to 36 months, sometimes even less. Even with no interest, this means high monthly payments that are simply not feasible for most consumers.
Should you fail to make a payment, there will be a clause in the contract that states you must pay an additional amount as if an interest rate had existed in the beginning. Missing a single payment changes the terms of the contract, and the zero percent financing deal is off. You are now stuck with a very high interest rate, and a number of penalty fees will probably be tacked on as well.
Zero percent financing is offered on a slimmer selection.
Zero percent financing or a rebate? The customer will have to choose one; they don't get both. Rebates are often the better deal. Don't be lured away just because it sounds good. Do the math first.
Qualifying for zero percent financing does not mean you get a better deal, even if you manage to make all your payments. The dealers make up for the lost financing charges by raising the price on the car. This happens pretty frequently because customers often lose their heads to giddiness. The financing component of a car transaction is only one of three. If you do happen to be one of those who qualify for zero percent financing, remember to negotiate hard on the price of the car.
All in all, zero percent financing are scams that can be beaten. It is even clearly spelled out how to beat it. The only hitch being that the dealers de-emphasize how unlikely it is that a consumer will be able to pay it off.