Low-Interest Car Loans and Deals
Low-Interest Car Loans and Deals
Posted on April 15, 2020
The coronavirus crisis is hitting hard with every kind of business, and the auto sales industry is no exception. With traditional showroom shopping largely out of bounds for careful customers, sales have fallen dramatically across the board.
However, although the situation is worrying to say the least, there are at least some positives to be taken. For people looking to buy a new car, COVID-19 has pressed dealerships into offering ever more affordable financing deals which make getting on the road as easy as possible.
Zero-Interest Car Loans and Deals
Although a 0% car loan deal may be unusual in normal times, there are now companies offering zero-interest deals with repayments stretching over 72 or even 84 months. Usually, a loan of this length isn't necessarily a good idea, as you'll be tying yourself in to credit repayments for many years, making it more difficult to change your car. Also, paying interest over seven or eight years means the total cost is higher than with a shorter loan.
However, with a 0% deal, these drawbacks are eliminated. Your monthly payments will be much lower than with a regular five year loan. And with all your payments going toward reducing the debt, you'll build equity in your car a lot more quickly, making a later trade in more realistic.
Zero percent loan deals aren't necessarily easy to find, but the longer the COVID-19 pandemic continues, the more likely manufacturers and dealers are to introduce them, so keep checking. Interest-free deals are currently offered on selected models by Dodge, Hyundai, Kia, and others.
Deferred Payments
Generally, long-term zero interest car loans will have strict approval criteria, and may not be available to anyone who doesn't have perfect credit. But even in these cases, the coronavirus situation can still have an unexpected side benefit.
Most car manufacturers are now offering a deferred payment option, where you can drive away a new car with nothing to pay for 120 days or longer. Combine this with a low-cost or even zero-interest loan, and it's hard to think of a better deal on new car models.
Lease Deals
Lastly, taking out a car loan isn't the only way to drive a new car without spending a fortune upfront. Leasing is a convenient alternative to ownership, where you can benefit from a brand-new vehicle with simple monthly payments over two or three years, and no commitment after the contract period is up.
And in these coronavirus times, leasing can be even more attractive. Many car makers and dealerships are offering attractive lease options with payments deferred for two or three months, and in some cases payments even refunded as a cash bonus. Car makers currently offering these deals include Land Rover, but you can expect most leasing options to follow suit sooner rather than later.
But whether you buy or lease, now's not the time to accept an expensive deal. With sales down and the future uncertain, dealerships are doing everything they can to secure precious customers, and savvy car buyers should make the most of this situation while it lasts.