Most "special" rates are just gimmicks designed to get you into the dealership

Man Holding Car Key / Zero Percent Financing Might Not be a Good Deal
Image: NCCC
Updated: February 20, 2017

Have you ever been offered zero percent financing by an auto dealer?

Chances are that you have not. Even if you are offered zero percent financing, you can probably save more money by taking a rebate and financing the loan through your credit union. Depending on the amount you finance, your payment could be substantially lower per month while saving you more money in the long run.

Just a Gimmick

Most of these special interest rates are simply gimmicks to get you into the dealership, where you become subject to high pressure sales tactics. Don't fall for it.

Most people will never qualify for the special teaser rates. In some cases, the special rates only apply to one particular vehicle, or stock number, which they may not even have at the dealership or for certain financing amounts.

Did you know that most car manufacturers already include the cost of the doc fee in the price of the car? That's right. You're paying extra money! Most dealers will also get a certain percentage of the MSRP price from the manufacturer, regardless of the final sales price.

Be careful about other language you encounter with car ads. Does it say "Qualified buyers?" How about "Not available in all areas?" "See dealer for details?" It's all bait to reel you in. You may even notice that the disclaimer is whispered at the end of the ad so you cannot hear it. All of these statements are warning signs that the hook is out there waiting for you to bite.

Don't Rush

If you do manage to qualify for 0%, don't be rushed. Get the offer in writing FIRST and then go home to look things over.

Consumers are often rushed into signing the deal on the first day, which makes them highly susceptible to being ripped off. Does the offer show a different price for the car than what the sticker says? Dealers often try to raise the price of a car or add new fees after they agree on the price of the car. They then get you to quickly sign the paperwork. Once you sign that paperwork, the car is yours regardless. Don't fall for it.

You may even be able to take that offer to another dealer, who might be able to beat the price by several hundred dollars. Keep taking the offer from dealer to dealer until you get a good price.

You can even tell the dealer a white lie: "So-and-So Dealership is going to sell me this EXACT car— same color, same exact options— for this much. Can you do better?"

If they say they can't, just leave. It's not worth the hassle.

Don't Be Afraid to Walk Out

Whatever you do, don't buy the car the same day the deal is made. Don't sign any papers and always get any promises in writing, even if it is as simple as a free waxing or a complimentary oil change.

At the bottom or on the back of the paperwork is a disclaimer that essentially says every promise they have orally made to you is null and void. Once the deal is made dealers often 'forget' about those free offers they made you.

Later, when signing the paperwork, make sure the total amount to be financed is the same as the total amount on your offer. Always focus on the bottom line price and not the monthly payments. The payments can be changed with the touch of a button.

Watch out for the hidden fees and if you don't get what you were promised, don't be afraid to walk out without signing. If they want your business, they WILL give you what you want.