0% Finance. Ensure You Read The Fine Print

Sluggish sales over the past many months and burgeoning inventories are forcing auto

companies and car dealers to come out with innovative car finance arrangements in order to stimulate demand in the market place. Though sales of new cars have been picking up consistently, it is still nowhere as it used to be before the economic meltdown - and that is a point of concern for car makers, as well as their dealers.

Also that credit has not been picking up in the manner it should, and many people are not willing to extend themselves in going for car loans the way they used to, are other reasons for them to launch aggressive car finance schemes. Yet another reason is the preference of consumers in going for used cars due to some of the obvious benefits they perceive them to have.

One of the more interesting car finance schemes is the 0% car finance scheme. In this the consumer is allowed to drive away with even a brand new SUV and is required to pay nothing by way of interest for a period of 72 months. Car makers have been pretty aggressive in the print as well as visual medium in promoting this arrangement.

However, as attractive as the scheme looks on paper, it is worthwhile examining the possible loopholes or conditions you may have to fulfil so that you do not end up making a wrong decision in opting for this scheme.

The first constraint is the fact that such offers are normally restricted to specific categories of vehicles, and in this case it is the SUV. Now if you are the kind of person that does not fancy such a vehicle, opting for it just because it is available at such an interesting arrangement may not be the right choice. You have to consider maintenance as well as fuel costs associated with such a vehicle and that may come back to haunt you once you start using the vehicle. Your earlier preference for a smaller car would therefore have been a better one.

The other aspect you have to be careful about is the high price tag on such vehicles. Most of these vehicles would have already depreciated in value and because the dealer or company would not be giving any discounts through cash rebates due to the special finance arrangement, you might end up actually paying almost the same amount without realising it.

Another point is since the repayment is going to take place over six years, the depreciation that will take place will drastically reduce the value of your vehicle and you would also be forced to use the same vehicle over this period.

To summarise, it is advisable for you to go for such 0% car finance if you are the type who does not mind taking a hit on the vehicle model and are willing to use one for such an extended period of time without any change.

by: Roger Thurston

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