0% Interest Auto Loans Available Scam

Everything you ever wanted to know about the "0% Interest Auto Loans Available Car Dealer Scam" but didn't know who to ask. Also known as the "Low Interest Loan Scam."

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You will see or hear this in car dealers advertisements. Dealers use the 0% interest advertising scam to get potential car buyers hyped up and interested in buying a new car.

These consumers believe they will be able to save money if they finance a car at a 0$ interest rate.

This advertising trick is a simple play on words. Unless it's otherwise stated, to qualify for the special APR of 0% you must have excellent credit and the rate may only be available for a shortened term of 12-36 months.

A shorter term makes the payment on a new car unaffordable for most people and they must extend the car loan term to get the payment down to their budget. Of course the rate is higher the longer you extend the term of the loan.

Definition of the 0% Interest Scam

Many manufacturers' offer 0% interest financing to their customers from time to time. If you're looking to take advantage of this opportunity, make sure you read the fine print and know the manufacture's program guidelines.

The 0% interest advertising scam is used to lure potential customers to a dealer's lot. A dealer will advertise 0% interest available in their local advertising. They make it look like the offer is available to everyone and anybody. Car buyers assume the 0% interest is available on all makes and models and also any term.

In reality the dealer only has the 0% interest offer on certain makes and models and the special rate is, unless otherwise stated, on a very short finance term, normally 12 to 36 months. The consumer also has to have excellent credit to qualify for the program also.

Dealers are aware most people cannot afford the high monthly payment that comes with short term financing. The goal of the dealer is to have the customer come in off the 0% interest advertisement, fall in love with a vehicle and then choose a longer finance term with a higher interest rate.

How the Low Interest Advertising Scam Works

You see an ad on television promoting "0% interest available this weekend only." You decide to take advantage of the additional savings and visit the dealership.

You know you have perfect credit and ask the car salesman if 0% interest is available on the car you're looking at. He says, "absolutely it is." However he never discloses to you it's only for a short finance term.

You picked out a vehicle, agreed to the price and now patiently wait to meet with the finance manager. You ask your salesman if you qualified for the 0% interest and he says, "you sure do, your credit is perfect." Everything seems to be going to plan all that's left is the paperwork, it's now time to relax ~ BIG MISTAKE!

The car salesman and his sales manager have already prepped the finance manager you're interested in the 0% interest rate. This lets the finance manager know what's important to you and prepare for your objections in advance.

You're greeted by the finance manager and are led to his lair (I mean office). He starts with a little chit-chat then brings up that you qualify for the 0% special interest rate and then confirms with you that's what brought you out to buy a car today. Here's where it starts getting nasty.

A dealer will let you go through the entire car buying process not disclosing to you the 0% interest is only available for a very short finance term. The dealer knows this technique is the most effective when you don't find out until right before you're about to sign the paperwork because mentally you've already bought the car and are just ready to get out of there.

While going over your paperwork, the finance manager states your payments will be $958.33 a month. This comes as a shock to you and you ask, "I thought I qualified for the 0% interest rate?" The finance manager says, "you do but for you to get 0%, you must finance your vehicle for no longer than 24 months."

Don't think this is an accident, the entire presentation by the finance manager is premeditated. He does this many times a day. He's prepared for you to lose your mind when you hear the outrageous payments.

The dealer is counting on by this point you've fallen in love with the car and will decide to extend the financing term out to make the payments more affordable for your budget. The finance manager is already prepared and will show you several different options with higher interest rates to choose from, guaranteed to make the dealership more money.

Making a car buying decision based on emotions after being side swiped by this advertising scam can be financially dangerous. You can end up paying thousands of dollars in unnecessary interest charges and bank fees.

Only finance a car with a dealership as a last resort. Get a pre-approved auto loan before contacting a car dealership. You can also use your pre-approval to negotiate a better deal with the dealer. Click here to learn how to get a pre-approved car loan online.

How to Avoid the 0% Interest Advertising Scam

Now that you know how to recognize and avoid the "0% Interest Car Loan Scam," familiarize yourself with other common car dealer scams committed in dealerships nationwide.

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Recommended Sites for Online New Car Shopping

TrueCar, Edmunds and CarsDirect are the quickest way to compare new car prices in your local area. These online sites will provide you with free, no-obligation price quotes and the discounts you receive will give you confidence on your next new car purchase. Walk away from the dealership knowing you received a good deal, not hoping you did.

Share Your Tips - If you have any additional information about this dealer scam that will help other car buyers save money. Please tell us about it in the comments below, so we can share it with everyone.

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