If you want to buy a new car but don’t have the necessary liquidity you can evaluate one of the many solutions financing designed specifically for these particular needs. The market offers various types of Captain Vere cars but one of the most widespread and often publicized formulas, are the zero-interest car loans, or a loan that does not provide for the long-term interest and that will allow you to pay the convenient price by installments original of the car. In this article, we explain how to access these types of financing and how they work.
How does a zero-interest car loan work?
How does a zero-interest car loan work? In recent times, given the economic crisis that has hit the automotive market of the West, more and more car dealerships have reduced or in many cases completely removed interest rates to ensure that their cars were also sold to small savers. The lack of interest rates makes it possible to pay, albeit postponing it over time through convenient monthly installments, the original price of the car without adding substantial extra costs that would otherwise drive up the overall cost of the purchase.
But we must be careful: the “zero interest” offers are not always free. In this sense, it is necessary to check two specific interest rates: the APR (Annual Global Effective Rate) and the TAN (Annual Nominal Rate). The first is an overall cost on an annual basis which includes, in addition to nominal interest, also all those ancillary expenses that occur with the opening of a loan, such as for example the costs of the case, the start-up costs, any reimbursement costs installment and so on;
The TAN is instead limited to calculating the single interest rate on the nominal value of the financed amount. Should you require a new loan and you want this to be effectively at zero rates you will have to make sure that both the APR and the TAN are effectively null, that is that there will be no additional amounts to be paid in addition to the nominal value of the car you have decided to purchase.
Zero rate car loan: what are the expense items to consider?
It is not always easy to find an effective zero-rate loan: trivially the concessionaires who grant these types of loans still need to obtain an effective gain on their granting of money, which is why you will often find very advantageous options that will not, however, be completely at the rate zero.
One of these will be loans with TAN equal to zero (that is, with interest on the nominal value of zero) but with some ancillary expenses to be debited in the form of APR. In this sense, you will be able to consider yourself lucky if you are offered loans with no TAN and an APR of less than 3 %: the interest will be very slight in this case and you can proceed with the financing without too many problems.
Another solution only the mini-installments. This type of financing is dedicated to those who have saved a significant amount of money for their purchase and wish to obtain a subsidy on monthly installments, which will be minimized, however, due to the payment of a substantial “deposit”. Alternatively, you can opt for a variable rate loan, with lower interest rates but variable over time and/or based on the amount granted; or at the reduced rate, lower than the market values, so however it is necessary to rely on a credit institution.