Best 0% APR + Low Interest Finance Deals Right Now (2024)

What Does 0% APR Mean When Buying a Car?

0 APR or zero percent financing means you pay no interest on your monthly auto loan payments which can add up to thousands of dollars saved.

When you get a car loan from a dealership or lender, they make their money by charging you interest and loan fees. These fees are factored into your monthly payment and spread out across the life of the loan.

The annual percentage rate (APR) is the percent of all your payments over a year that goes towards interest and fees. The higher the APR, the higher your monthly payment.

If a dealership offers a promotional 0% APR loan, they are waiving their loan fees and interest as an incentive to get you to buy a car. 100% of every payment you make will be applied to your loan principal.

Is 0% APR Worth It?

0% APR financing can save you a lot of money on your car purchase since you're not paying any interest on the car loan. The average price of a car is around $36,000 and with 0% financing over 60 months, monthly payments come out to around $600. If we applied the average APR of 4.96%, the monthly payment on the vehicle rises to $678 a month, or $4,700 in interest payments over 60 months.

Is 0% A Good Deal?

0% APR offers can save you thousands of dollars in interest payments over the life of the car loan, but you should be wary of the reason the dealer is offering them. If you read the fine print, you'll realize that most zero APR offers will require you to be a well-qualified buyer with excellent credit and you cannot combine with other offers.

Are Long Loan Terms a Bad Deal?

Long loan terms typically require a higher interest rate since that’s how lenders make their money, which leads to a long-term loan ultimately costing thousands more in the end.

But what about those long loan terms that offer 0 percent financing for 72 months or longer?

On the surface, the longer you can get 0% APR, the better.

But there’s always a catch. Dealers aren’t offering 0% APR out of the kindness of their hearts, so you can expect there to be special restrictions like that rate only applying to certain models or charging car buyers heavily on other things like add-on products and extended warranties.

What’s the Catch With Zero Percent Car Loans?

While 0% APR loans can be a good deal, there’s also a catch to consider. Once the dealer gets you in the door with the zero APR loan offer, you may find that it’s more of a bait-and-switch, with the offer only applying to very specific models and packages that have limited stock available.

Dealerships can offer zero interest car loans because they make money on the sale in other ways, like a higher car price, or add-ons in the Finance Office with things like gap insurance or extended warranties. And sometimes the catch is that the low APR may only apply up to a certain amount requiring you to make a bigger down payment else pay a higher APR for anything above the limit.

Additionally, you can often only choose either 0 APR OR cashback, not both. Learn more about choosing between low APR or cashback.

Can you Get Zero Percent Financing on Used Cars?

0 APR used car deals are rare, but not unheard of. Typically, thistype of incentive is only offered on new cars. One exception is Volkswagen, which has been running 0% APR financing for 60 months on their CPO (certified pre-owned)during the COVID crisis.

Occasionally, a dealership will advertise a no-interest deal on a used vehicle, but these are very hard to find. A better approach to is focus on negotiating the sales price of the used car you want and then get competitive financing from a bank or credit union.

How to Get a 0% APR Car Loan

In most cases, low APR loans have strict requirements that can be difficult to meet. Typically, you’ll need to have excellent credit, but you must look carefully at the advertised deals to know what the qualifications are.

What Credit Score Do You Need to Get 0% Financing?

Lenders rarely advertise the minimum credit score to be eligible for 0% financing. However, you'll typically need at least a 700 credit score and a score above 720 will give you a better chance of being approved.

Can You Get Zero Percent Financing With Bad Credit?

You are unlikely to qualify for a zero percent auto financing offer with a credit score less than 700. These deals are reserved for borrowers with prime or super-prime credit.

However, if you have poor credit you still have options.

There are a few companies that work with dealerships that specialize in subprime lending. This means that you can buy a new car, even if you have a 500 credit score. Typically, these companies will speak with you about your vehicle preferences and then connect you with local dealers willing to offer loans to customers with poor credit, often with no upfront payment.

If you have bad credit, check out our partner,Auto Credit Express, who has one of the largest networks of car dealerships across the United States.

Monitor Monthly Incentives

Part of getting an appealing low APR car loan is to carefully monitor monthly incentives. Most manufacturers change their offers at the beginning of every month with incentives on different models.

Bookmark this page to check for the monthly updated deals, or sign up for the Car Deals Early access list at the footer of this page to get notified by email.

All 0% Finance Deals for May 2024

Below is a list of all the current 0% APR deals offered by each manufacturer right now.

These offers may vary based on location, credit score, and financing terms and are not guaranteed. So use my free service to Check Discount Car Prices to get the best prices that include current manufacturer offers and incentives.