On the occasion of the Motor Show with its exceptional conditions, the advertisements for car loans flourish at zero percent interest (the term “free loan” may not be used). As it is the intention of the car manufacturers to sell as many cars as possible, it is logical that they do everything in their power to remove any barriers for the customer.
Are there any clauses and / or special conditions that the customer must meet before being able to enjoy this interest rate?
Car loan interest rate
Not necessary. If there are no conditions, then these offers are often interesting. Unfortunately, there are sometimes binding conditions. Below you will find an incomplete list of clauses and conditions that Best Finance has identified for you:
- The 0% APR is often offered in combination with a warranty extension or a prepaid maintenance contract (4 or 5 years or x number of kilometers). However, according to the legislation related to tying, you are not obliged to subscribe to both products, but the car manufacturers have all the benefits of selling this combination in terms of marketing.
- Sometimes an advance of 30 percent of the purchase price is requested, which of course does not always make it possible to enjoy the offer if you do not have the necessary reserves.
- Sometimes you not only have to pay an advance, but your last repayment can go up (sometimes in the thousands of euros )
- The obligation to take out comprehensive insurance
- Relatively short installments (36 months) to reduce the risk for the financial institution. The result is of course that the monthly amount to be paid is higher for the customer.
Another essential aspect that you should not ignore
As we have already explained in our guide “Choosing a car loan” – is that with this type of loan you run the risk of missing out on a major discount. Indeed, if you state too quickly that you want a loan, you are probably losing your bargaining margin and you may miss out on an interesting discount. Remember that the interest rates that the banks offer during the motor show are often very interesting, and that you do not have to meet specific conditions. Click here to compare car-free!
The car manufacturers also offer other, more complex formulas (renting, leasing, financial and operational), but these formulas are primarily intended for the professional car park and are therefore difficult to compare.
Make well-considered financial decisions and do not hesitate to ask all your questions to both the constructors and the financial institutions. And above all, don’t forget to compare all financial solutions!