Zero Down Zero Percent
if you have spent any amount of time looking at cars for sale, you may have heard the term 0% APR. This is actually an American term that basically means you can get your car finance with no interest accrued on the balance. Here is SA we call this interest-free finance but it's the same thing.
Related: Will buying a car affect your credit score?
Getting your car financed interest-free sounds too good to be true, but as in all things, the reality here is that these financing deals are a tool that auto manufacturers can use to sell more vehicles.
Car finance providers that offer 0 percent financing are known as captive finance companies and are linked to the OEM auto manufacturers themselves. Some examples of captive lenders include Toyota Financial Services, Ford Motor Credit, Nissan Finance, and so on. So if Toyota wants to sell more 2021 Fortuner's they might offer a 0% interest for the first 6 months to selected customers through their in-house finance.
These offers are usually not advertised and will usually only pop up when an OEM needs to move stock. These offers will usually only be offered to selected customers and they will usually have excellent credit to qualify for these special financing deals.
It is also important to remember that the OEM will make up the money that they are forfeiting on the deal elsewhere by getting the customers to finance other equipment with the vehicle such as aftermarket wheels, offroad equipment, lifestyle gear, etc.
