Zero percent finance on car loans is an interesting sales strategy that is being adopted by dealers and lenders nowadays. This would mean saving thousands of pounds which would have otherwise gone towards interest. And so, buyers are getting attracted to this conception. However, this strategy has many drawbacks and is merely a method to attract customers.

Almost all car dealers who offer a zero percent finance, have a sales plan in place. They will have outlined a profile of the prospective customer. Quite obviously, a major criteria would be that the customer should have a good credit standing. SO, normally such offer will be made to existing customers. New customers would be judged for credit background on several parameters like, income, location of the customer, employment or business status, or even the assets that the customers own. For obvious reasons, credit term is usually shorter than the normal regular interest credit scheme, often below 2 years.

Statistics reveal that only one-third of buyers who apply for zero percent financing actually gets qualified for the loan. There are quite a few conditions that you need to fulfill.

1. Credit score: The credit reports of the customers are considered in the case of the zero percent finance deals. Not only this, the guidelines and other terms are also severe for the credit score. If a person is suffering from the bad credit history then he could be denied of the car finance. To get the zero percent car finance deal a person must have the credit score of above 700. This criteria of the bad credit score can makes a person ineligible of getting the loan because most of the people who are applying for the zero percent car finance deals have a bad remark on the history of the credit.

2. Selected models: Another fact is that these zero percent car finance deals are only applicable for the few car models which are present with the dealers. Misery is even more added when customers came to know that the models on which this scheme is available are outdated and are not in demand because of many reasons like the bad performance, less efficiency and mileage. Sometimes the desired models of the car can be available with the dealerships but then the interior and colors of the models are not accepted by the customers.

3. Short duration: Another tactic followed by the dealers is that they provide the zero percent car finance deals for a very shorter period of time. In most of the case the time of 36 months is given by the dealers where the buyers demand for 48-72 months. There is no interest charged for these finance deals but the monthly payment is very high as the time period is very short.

What advantage does zero percent finance car give you the as the customer. On the other hand this is certainly a good marketing strategy for auto dealers. And it will definitely help those who can afford the terms because it always better than paying longer credit period. So, the zero percent finance car is a good marketing strategy for the car dealer. It is also beneficial for the customer who can afford it.

You might have dreamed of buying a car since a long time but have been unable to fulfil your dream due to lack of finances. Purchasing a car through easy car finance can be your perfect solution. Whether you want a brand new car or a used car, getting easy car finance is the best option. There is a multitude of lenders offering such loans.

You can avail easy car finance as a secured loan or an unsecured one. Secured car finance proves to be a viable option when the car that you want to buy is highly priced. You need to offer your property as collateral for such car finance. The advantage of such finance is that the rate of interest is low and repayment period is longer which reduces the burden of repayment considerably for the borrower. On the other hand, unsecured finance does not require any collateral to be placed and is completely risk-free for the borrower. But the lender charges a higher rate of interest and the loan amount is smaller.

You can avail easy car finance even if you suffer from a poor credit history. Lenders are willing to provide finance to borrowers who have defaulted on past payments, have faced CCJ’s or IVA’s, made late payments, have arrears and so on. But remember that such borrowers need to pay a higher rate of interest.

Many lenders offer attractive easy car finance packages. Take quotes from various lenders and compare them before signing a particular deal. Also ensure that you deal with a reliable dealer for quality concerns. You could also search on the internet as it provides an easy access to quotes from a number of lenders. Take easy car finance only from that lender who fulfills all your requirements on all fronts.

Choosing a car is always a difficult job. But still more difficult is choosing an appropriate car loan. Financial packages are that important. At times, the car dealership itself offers the finance packages. But it is not obligatory that you should opt from among the packages offered by your dealer just because you purchased your car from them. You are always free to take a loan from somewhere else, such as a bank, and pay for the car outright, and then simply make the loan repayments to the bank as with any other loan. Some of the most safe financing options are:

1. Hire Purchase

Let your deal be direct with the finance company concerned. Hire Purchase is being regarded as the traditional way of buying cars. The advantages of hire purchase are many.

• Minimum deposit
• Negotiable interest
• At the end of the term, the car will be yours.

Disadvantages too are there:

• Higher monthly payment
• Since the loan is there on the car,chances of repossession are there if defaulted

2. Personal Loans

The most promoted financing option. The greatest advantage of Personal Loan is this that the loan is not secured on the car. So you can sell the car whenever you like without having to repay the loan. The car cannot be repossessed. Other advantages are:

• Competitive rates
• Low interest
• Easy access

Disadvantages:

• High monthly payments

Dealers often make commissions when they arrange finance for you. So, don’t think that the rate is lower than arranging a loan through your dealer.

3. Mortgage

Though the lure of low monthly payment is there, you will be paying for the car for 15-20 years. Since the loan is on your house, chances are there that you may lose your house if defaulted.

Advantages:

• Low rates
• Low monthly payment

Disadvantages:

• Complicated and costly
• May lose your house if defaulted since the loan is secured on your house
• Longer repayment periods
• High total amount of interest

4. PCPs (Personal Contract Plans)

PCPs make you pay an upfront deposit, and then you pay low monthly payments. You can even sell the car if needed. Extras charges for administrative work, length of payment, APR, monthly payment, etc may require strong bargain.

Advantages:

• Competitive rates
• Low monthly payment
• Easy to get
• It’s easy to change your car every two or three years
• Maintenance charges can often be rolled into the payment

Disadvantages:

• High total interest
• You will have to keep within a mileage limit if you want to have the option of returning the car at the end of the agreement

The better the awareness you have, the more economical will be the deal. The most important thing is this that you should know exactly how much you are being charged for car finance. The annual percentage rate or APR will help you know exactly the charge of any credit. But this doesn’t mean that an attractive APR will do! Down payments and closing payments are as important as the monthly payment terms. Also, don’t fall into the lure of immense cash discounts. Providing a cash discount otherwise means charging extra for credit. In common parlance, hire purchase is often referred to as car finance.