0% APR Car Finance Deals | AutoTrader (2024)

FAQs

What credit score do you need for 0% APR on a car? ›

Lenders want to ensure you have a near-perfect history of making payments and handling your debt before offering you no-interest financing. An excellent credit score — 781 or higher — will get you the best deal on financing, but you can still qualify for a competitive interest rate if your score is 670 or higher.

Be careful since the loan conditions are constructed such that they can charge you a higher rate on the initial loan amount if you don't pay the loan back on time or within the given term. The loan durations are much shorter when using zero percent financing, which increases the monthly vehicle payments.

Zero-interest loans, where only the principal balance must be repaid, often lure buyers into impulsively buying cars, appliances, and other luxury goods. These loans saddle borrowers with rigid monthly payment schedules and lock them into hard deadlines by which the entire balance must be repaid.

Zero-percent financing deals can work well for those who have a high income and excellent credit, but in most cases 0% really isn't as great as it appears.

Your 0% APR deal could be canceled

And if your payment is late, even by a single day, your card issuer could cancel the 0% offer and reset your card's interest rate to the ongoing APR. On top of costing you interest and late fees, missing payments could also end up hurting your credit scores.

Interest rates

One way to lower the cost of buying a car with your credit card is to take advantage of 0% intro APR offers on purchases. These promotions are typically less than two years, so they have a shorter term than most car loans.

Find out the answers to these questions and more. With a 0% promotional or introductory APR, qualifying transactions won't accrue any interest during the promotional period as long as all credit card terms and conditions are met. Promotional APRs have to last at least six months. And they may last even longer.

Credit card companies know that interest rates are important to consumers, especially those who often carry a balance. They run 0% introductory offers as a way to entice customers to sign up.

With zero percent financing, you're more likely to impulse buy. And since you feel like you're saving money with the 0% APR, it's easier for the salesperson to talk you into overspending on fancy upgrades and extra features you simply don't need (like extended warranties or gap insurance).

How old of a car can I finance for 60 months? ›

There's no universal maximum loan term for a used car. However, lenders and banks typically follow common guidelines, especially as it relates to age and mileage. For example, you usually can't finance a used car older than 10 years with a five year loan.

In the case of a 0 percent APR loan, you'll pay nothing in interest. This type of loan is possible because it's not the bank that's giving out these loans, they're typically going to be financed by the automaker.

Long-Term Financial Impact

While you may save on interest with a 0% finance deal, longer loan terms can mean you end up paying more for the car over time. Additionally, consider the impact of potentially higher monthly payments on your budget.

Credit score: You might need a credit score of at least 740 to be considered for a 0% APR loan. The minimum credit score depends on the dealership and the car you're interested in purchasing.

A credit card with an introductory 0 percent APR can help you manage new debt or pay off old balances. However, a 0 percent intro APR card can hurt your credit if it causes you to carry a higher balance than usual or if you carry your balance beyond the introductory 0 percent APR period.

0% APR cards require good to excellent credit

This means you'll need a FICO credit score of at least 670 or a VantageScore credit score of at least 661. If you have very good or excellent credit, which means a FICO score of at least 740 or a VantageScore of at least 781, your chances of approval are even higher.

The base FICO score is also called FICO Score 8 or 9. It's not designed specifically for auto loans, but many lenders use it. It's a number between 300 and 850, and a higher score means that a person is more likely to make loan payments on time.

Making on-time payments to creditors, keeping your credit utilization low, having a long credit history, maintaining a good mix of credit types, and occasionally applying for new credit lines are the factors that can get you into the 800 credit score club.

Most used auto loans go to borrowers with minimum credit scores of at least 675. For new auto loans, most borrowers have scores of around 730. The minimum credit score needed for a new car may be around 600, but those with excellent credit often get lower rates and lower monthly payments.