Is the Zero Interest on New Cars Really Interest-Free?
2 Answers
New car zero-interest offers are indeed interest-free. However, 4S dealerships will charge loan customers certain mortgage handling fees, and may even require prepaid insurance premiums while bundling car insurance for the next few years. Although there is a certain degree of discount on loan interest, the accumulated costs from other items mean that the actual amount paid isn’t significantly less, and in some cases, customers may even end up paying more. Additional Information: Differences Between Full Payment and Installment for Car Purchases: 1. Installment: Applying for a car loan through auto finance companies, banks, or other institutions, using the installment method to pay a down payment first and then repay the remaining amount monthly, allowing early access to the car. (1) Additional Insurance: For loan purchases, the commercial insurance portion is usually negotiated with the 4S store before purchase, requiring at least compulsory insurance, vehicle damage, third-party liability, and theft coverage. Discounts may be limited. (2) Renewal Deposit: Some 4S stores also require a renewal deposit, which is non-refundable if the customer does not renew the insurance with them the following year. (3) Certificate Pledge: For loan purchases, 4S stores typically hold the vehicle’s certificate until the loan is fully repaid. 2. Full Payment: Paying in full for a car involves fewer complications and issues, whereas loan purchases often come with additional dealer-added accessories or decorations.
I've had plenty of experience buying cars, and those zero-interest ads for new cars are indeed tempting, but you need to be cautious. When manufacturers or dealers run these promotions, the zero-interest offer is just on the surface—they might make up for the profit by inflating the car's price, charging handling fees, or adding various extra costs. For example, a car originally priced at 150,000 might be marked up to 170,000 with zero interest, and in the end, you're still the one losing out. Also, shorter loan terms mean higher monthly payments, and the total amount might end up being less favorable than paying in full. I often advise friends to check the contract details before buying, bring a calculator or an app, and calculate the total cost. Don't forget that your credit score also affects approval—if it's too low, you might get rejected. In the long run, choosing a stable car model with high resale value is much more practical than obsessing over zero interest.
