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The Truth About 1% Car Finance

You go into a dealership or see an ad somewhere and you get excited about 1% car finance. Too good to be true, right? Before you grab such an offer, you must understand that a buyer typically pays more for the vehicle with this type of financing. Care to know why? Check out these informative slides.

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The Truth About 1% Car Finance

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  1. 1% Car Finance: What's the Catch?

  2. The catch is typically that you pay more for the car. That's the biggest one. Aside from that, there's going to be a huge qualification barriers that the customer has to jump through. You typically do have to be asset backed. You have to be in your job for a long time, there are fixed terms in terms of the finance. You might have to take it over three or four years very strictly, but more than anything, there’s the price of the car. I used to work in dealership land many years ago and we had a particular vehicle that for six months of the year we would sell it for $26,990. The applicable interest rate would be whatever you qualified for, be it five, six, seven, eight, whatever it was. For the other six months of the year, if we were overstocked on that car, we would run a marketing campaign at 0%, but the price of the car would be $31,990.

  3. You often find when you go into a dealership and you’re after one of these 0 or 1 percent campaigns, it's very difficult not to walk out being sold a warranty that you don't need or some after care products for car paint protection, interior protection, excessively costed window tint and so on and so forth. So it's typically the price of the car but there's a range of other catches that come with it as well.

  4. IN THIS VIDEO: Senior Asset Finance Broker Francis Valente explains the “catch” that comes with 1% car finance.

  5. Don’t let yourself get caught in an unwanted car financing deal. Our brokers will work hard to help you find the most competitive options from Australia’s leading lenders. Visit our website today to learn more.

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