Do I Qualify For 0% Financing?

Do I qualify for 0% Financing? This is a question I get asked all the time, especially with GM's 72 Hour 0% Finance Sale.

There are a few things GMAC or other lenders will look at when granting 0% interest on a loan. They will see if you have had a car loan before and how you paid. If you were late 10 out of 20 payments, it may be hard to get 0% interest. They will also look at Mortgage Payments as well to see how you paid. That is the 2 main factors when figuring 0% interest. There are other things to consider as well that are a little more complex.

The Lender will look at how much you are financing compared to how much you make. You will not get a $40,000 car if you make $1500 per month. This is common sense, you must be able to afford the auto.

Even though you are getting 0% interest on your car loan, you can still negotiate the price of the car. The fastest and easiest way to get the VERY BEST PRICE is Get quotes from Yahoo! Autosbecause their service is FREE and will insure you get the best price possible. Local dealers will Fight, I mean Compete, for your business!

The Lender will also look at how much you are financing compared to how much the car costs. If you have major Negative Equity, it may be hard to get 0% financing. If you have $15000 Negitive Equity to roll into the car you are buying, the lender may want you to take the Rebate instead of 0%. Most lenders will finance 115% to 125% of MSRP. On the high end using 125%, a $30,000 car would finance a maximum of $37,500. If you are $10,000 upside down, you would have to pay $2500 down or use the rebate instead of 0%.

The Finance Company will also look at your Credit Score. Usually a Credit Score of 750+ will grant you 0% automatically even if you are carrying a little more negative over to the car you are buying. A credit score above 650 will get you 0% financing if you are not financing too much over MSRP. A score below 650 could get you 0% depending on Down Payment, Past Credit History, etc. The lender is more interested in the structure of the deal. They LOVE to see Money Down. The Finance Company likes to see 10% to 20% down payment on all loans. When there is an initial investment on the car from the buyer, the loans are more secure because the buyer is invested in the car.

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