What you need to know about 0% finance offers

You’ve probably come across the cheap interest rate campaign before…. 0% finance or 1.99% finance.

Sounds awesome right?

I mean who doesn’t love free money?

Unfortunately though, the old saying of “if it sounds too good to be true then it probably is” is certainly the case here.

Here’s three things to look out for when it comes to cheap interest rates.

1. Read the fine print

At the bottom of the advertisement you might see that the loan might actually be underwritten by a bank…. Now we are all smart enough that banks don’t give away free money! Now come’on – so who is paying for this discount? You are! As the consumer you are paying for a premium for this discount which is being compensated for in the purchase price of the asset. Read the fine print about the terms and conditions; the ‘cheap loan’ may also require a deposit or have limitations around what term you can take the loan over. Ask questions to the dealer/business about the flexibility & terms of the loan.

2. Negotiate on the asset first

Walk into a dealership like a cash buyer, see what discount you can get on the asset first before talking finance…. you’ll probably find that you cannot get a cheap purchase price and cheap interest rate together. This is a good indication that you are paying a premium for the asset… my tip is to get pre-approved prior to going shopping.

3. Selected vehicles or equipment

You might see 0% finance and think that it applies to a brand new 4WD but actually only applies to a 2 seater hatchback. It’s called marketing…. Understand what vehicle the ‘cheap rate’ applies to…. Who know’s it might actually be a great offer when there is also a discount available on the vehicle, but it will need to be the vehicle you want in the first place!

To get pre-approved before your next purchase, you can contact me on 0431 177 605 or sign-up to our monthly email for my latest business and finance tips.




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