The Rich Borrow Free
Ever wonder about 0% loans? Are they too good to be true? And if so, why would the company even offer it?
It doesn’t take a genius to figure out that car dealerships advertise 0% car loans with small print that cite unworldly credit requirements. When normal customers apply for a loan the rate is less than extraordinary. But the dealership successfully used the 0% loan as a teaser to get people in the door. Nine times out of ten, the customer will buy anyway.
This isn’t just the case with loans. Dealers will advertise incredible pricing on a certain model car only to have one vehicle in that particular “trim level” available on the lot. But they sure have plenty of others to sell that cost thousands more.
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Lease pricing, too, is heavily dependent on your credit. Most leases require a score of at least 700 to qualify, and monthly payments will be much higher than advertised the lower your credit score (check your credit report now).
Of course, a few people qualify for the lowest available financing. The ones who need it least. Most people who can drive away with a 0% car loan have near spotless credit, and could probably buy the car with cash if they chose. Of course, taking 0% financing is actually better than paying cash because you can continue to earn interest while paying off the 0% loan.
Wondering how dealers can afford it? That’s easy. They’re still screwing you on the price of the car!
Related Posts
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- Online Car Loans Compared: Get Approved Before You Shop
- Perks of Using a Lending Club Loan to Buy a Car
- First Time Home Buyer’s Mortgage Checklist
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