I am looking to buy a new car that offers 0% APR finance.
1) Anyone offering this apart from Vauxhall?
2) What to watch out for?
Thanks.
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The main thing with 0% APR is that as it costs the dealer to provide it your gonna get stung somewhere else in the deal - normally you have to pay full whack for the car and pay a hefty deposit.
It may be cheaper to get the car at a discounted rate and then get a decent rate personal loan to pay for it - i'd be amazed if it doesn't work out cheaper overall.
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autoebid.com- you can either have 0% or a discount - your choice.
I persoanlly would do what blue haddock suggests and go for a bog discount. (unless that is impossible)
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Am I not right in thinking that on occasion, the manufacturer will stump up funds to allow either 0% interest/discount on car cost, whilst dealer foots cost of 0% interest/discount on car cost?
I see no harm in quoting, say, whatcar price to a dealer AND asking for the 0% interest.
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The other thing of course is that 0% interest is very attractive to customers who would also have an 'Islamic mortgage' in which no interest is paid, but the house is rebought from the 'lender' at a specified date in the future for a higher price than it was originally bought at. In other words, there's a finance product but there's no interest paid.
For the rest of us, 0% + a higher price is worse than finance at the regular price + interest amounting to the same total, because if you pay it back early you don't get out of the interest over the remainder of the loan's life.
I agree that interest free credit in and of itself is not a bad thing, but there is no point at all in getting hung up on any single aspect of a deal and by neglecting the other aspects, giving away more than the saving.
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Yes you are right - sometimes the manufacturer (or manufacturers finance arm) will cover the cost of the 0% finance or it could be a localised offer from the dealer.
Generally most dealers won't want to do both the whatcar price and 0% unless it is a manufacturer lead finance offer as they won't have the margin to do it.
Sometimes even if the APR is high the offers can be worthwhile though - at the moment Toyota are throwing £1000 towards the deposit on certain models and whilst the actual APR isn't great as long as you have the minimum amount over the minimum period (£5k over 24 months) you actually save money.
It works out to you paying about £900 in finance charges but you are getting £1000 from toyota so you save money by having it on finance.
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Toyota....Blue Haddock.
Dead right. My daughter purchased a new Yaris Blue in June 04. Toyota threw in money towards finance, I got a discount on the car (i.e. very good cost to change versus a Ford KA) +carpets, a full tank, the extra kit over the normal Yaris and free insurance for a year. With 0% would have been worse off.
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The main thing with 0% APR is that as it costs the dealer to provide it your gonna get stung somewhere else in the deal - normally you have to pay full whack for the car and pay a hefty deposit. It may be cheaper to get the car at a discounted rate and then get a decent rate personal loan to pay for it - i'd be amazed if it doesn't work out cheaper overall.
There is no doubt some truth in this but Trading Standards would definitely have something to say if there was any evidence that a price had been negotiated and then raised when the purchaser asked to take up the interest-free credit, as the increased price would then be a charge for credit and the APR could not legally be stated as 0%.
There are all sorts of ways round this for dealers and manufacturers but offering "discount OR 0%" is not a legal one.
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True, but I think that Blue Haddock is referring to one of the following:
1. Manufacturer reduces dealer margin on the car, hence no discount available to a cash or finance purchaser;
2. The "special edition" model - identical to the LX or whatever but called the "Sunshine" with a couple of bits of add-on tat, plus 0% finance available. However the dealer won't discount this in the same way as the other version. A variation on this is to have another slightly different, cheaper special edition.
Incidentally, I have seen manufacturers (one of the big ones in particular) offer "£750 cashback" or 0% finance - although I agree it is a bit of a misleading deal and I have my doubts about its legality, it is widely used and not just by brokers by any means.
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Amazingly, in France, if you see a zero per cent finance offer on something and you prefer to pay cash, you are apparently entitled to a discount on the original price on an officially fixed sliding scale according to the length of the free finance deal! Weird...ou quoi?
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Absolutely right - essentially, in UK it is forbidden to offer a discount as an alternative to Interest Free Credit, but in France it is compulsory - so in effect there is no interest free credit in France as you have to forego a price reduction to get it so it's not free...a bit like French cars really - works very well in theory!
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There are all sorts of ways round this for dealers and manufacturers but offering "discount OR 0%" is not a legal one.
That might be true, but one way 'they' get round is like the 0% deal is very much model specific - take VX for example, they're offering 0% finance on the SXi - which costs £10k, but on say the 'Life' (costs £8k?) it has no 0% offer - so you couldn't really buy a 'Life' with 0% since it doesn't qualify for the 'offer'...
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Im not plain stupid, just a special kind of stoopid.
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