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How to find the best car financing deals

When you use an auto loan to buy a new car, you’ll usually end up paying more than the purchase price over time due to monthly interest payments. But what if you could get a 0% interest rate? While you may think it’s too good to be true, 0% APR car deals are quite common.

Dealerships and car manufacturers offer these incentives to help them sell more vehicles. You could potentially save a significant amount of money depending on your car finance deal — but not all offers are created equal. Before you sign up for a 0% interest loan, you need to understand what they are and whether they're actually the best deal for you. 

What is a 0% APR financing deal?

0% APR interest car deals mean you won’t be charged interest on your car loan. Your monthly payment goes entirely to your principal, potentially saving you thousands of dollars over the life of your loan. Traditional auto financing includes principle and interest payments each month. But, with 0% APR car deals, you won’t have to pay the interest portion. This can lower your monthly payment over the same loan term or allow you to afford a nicer vehicle or trim package. 

Why would a dealership offer a 0% APR car deal?

Dealerships usually offer 0% APR car deals to help them sell more cars. Based on business objectives, seasonal promotions or the need to move inventory, absorbing the costs associated with 0% APR offers may make sense to the manufacturer’s bottom line, allowing them to sell more cars and still make a profit.

How do you qualify for car finance deals?

Car finance deals for as little as 0% APR aren’t available to all buyers. Instead, manufacturers limit them to “well-qualified buyers” only; manufacturers and dealerships will set the terms and conditions necessary to be considered a “well-qualified buyer” so be sure to talk to your dealership about those conditions. The dealerships and car manufacturers offering 0% APR interest rates don’t usually publish the exact credit score you need to qualify for the best rates, but you’ll typically need to have excellent credit.

What are the risks of accepting a 0% APR car finance deal?

On the surface, 0% APR financing car deals look like a great deal, but sometimes a great deal is too good to be true. While there are times accepting a 0% APR interest rate makes sense, there are also risks to consider before accepting a car finance deal.

Limited vehicle options

Oftentimes, 0% APR car finance deals are limited to specific makes, models, or trim packages, meaning the deal may not be offered for exactly the kind of vehicle you are looking for. These deals may also have a limited amount of stock or might not even be available at your local dealership. In most cases, 0% APR car deals are only available for new cars as well.

When determining whether you want to take advantage of 0% APR financing car deals, research to see if those deals apply to the car you’d like to purchase. 

Financing limits

Sometimes 0% APR car deals are limited to a set loan amount, meaning you pay interest on anything over that loan amount or make a higher down payment. These 0% APR financing deals may also come with set loan terms — the most common being 60, 72, and 84 months — which can be a longer loan term than you’re willing to commit to.

Expensive upsells

Finally, it’s common for dealerships to try to make a profit from 0% APR financing deals elsewhere. For example, you may not be able to combine the 0% APR car financing deal with other offers or rebates or be able to negotiate as low a price on the vehicle as possible. The dealership might also try to upsell you on extended warranties or protection packages that you may not want or need.

Do dealerships offer alternatives to 0% APR financing? 

Many dealerships offer cash rebates as an alternative to 0% APR financing — although you can sometimes find deals that come with both. If you do have to choose between 0% APR financing and a cash back bonus, you should consider how long you plan to keep the vehicle and how quickly you will pay down the loan. If you think you’ll sell the vehicle before you pay off the entire loan, the rebate could potentially save you more money than the 0% APR interest rate.

How to find car financing deals

Finding the right financing deal may feel overwhelming at first, but there are a few steps you can take to help the process go smoothly.

Check your credit history to see if you’re likely to qualify for 0% interest

Since dealerships are looking for certain buyers when offering 0% car financing deals, it’s important to first check your credit history to see if you may qualify.  You can use Chase Credit Journey to check your credit score for free. You are also entitled to a free annual credit report from annualcreditreport.com, the government-authorized website for free credit reports.

Search manufacturer’s websites for deals

The car manufacturer’s website is a great place to begin searching for 0% APR interest car deals on the car you want.  These sites may also offer helpful information such as the specific conditions to qualify for the deal, the loan terms, the loan amount, what dealerships could offer it, as well as the deal’s expiration date. Going to the manufacturer’s website is a great way to start researching what to expect out of a car financing deal, especially if you already have in mind the model of vehicle you want to purchase. 

Contact local dealerships to make sure a 0% APR car deal is still available

Once you’ve done your research on the different 0% interest deals out there, contact your local dealership to make sure the offer applies to that dealership and is still available, especially if there is limited stock associated with the deal. You might also be able to learn more details about the terms and conditions of any 0% APR car deals over the phone or in person. 

Once you’ve confirmed the offer is still available, set up an appointment to test drive the car and talk to a salesperson. Car financing deals change often. If you’re getting ready to buy a new vehicle, you should check what deals are available often to make sure you don’t miss the vehicle you’re looking for. 

After you find a vehicle and arrive at a dealership, they may need to confirm your credit to make sure you’re eligible for a 0% financing car deal. If you’re approved, you can sign your papers and drive home in your brand-new car knowing that you won’t owe any interest. 

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