0% Financing For Your New Car

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“A lower interest rate doesn’t make the debt go away,” quotes Dave Ramsey. But a lower interest rate might help you save on the overall amount you pay as a loan. When you buy a car, paying by borrowing a loan is a common practice. It is common knowledge that when you borrow a loan, you are supposed to repay the loan amount along with an interest rate charged on the same. But what if you could get a car loan at a 0% interest rate? Yes, this is a possibility not only for borrowers with good credit scores but for everyone. How can you get a car for zero percent financing? To answer this question, we have created this guide where we will share with you all the necessary details about what 0% financing is, how you can get this option and what amount you will have to deposit in order to get your car with this financing option. 

What Is 0% Financing On A Car?

If you are buying a car and plan to finance your new car with a loan, you must surely be comparing the various loan options that are available for you to find the car finance lowest interest rate. The lowest possible interest rate on a car loan is 0%. That is right. You can finance your new car without having to pay any amount as interest. All your installments will simply add up to the principal amount which is the cost of your car. You do not have to pay anything beyond this amount. This is what is known as Zero percent financing. This loan option is offered only by automakers and dealerships to promote sales. You may not find a 0% interest rate at your bank or an online loan provider. There are also certain factors that will help you qualify for this loan. Read ahead to find out more. 

How Can I Get 0 Interest On A Car Loan?

Banks and loan providers earn money by charging interest rates on the money that they lend you as a loan. When we consider a loan with a 0% interest rate, there is no profit for any financial institution in offering the same. For automakers and dealerships, there is the benefit of increasing sales. This type of loan option is therefore mostly offered by car dealerships. How do these loans work? Who can apply for and qualify for a 0-interest rate loan when buying a car? Let us help you understand the same. 

Zero percent interest rates are offered by car dealerships mostly to buyers who fall within the excellent credit score range. Having a higher credit score makes them more credible and the deal is safe even for the dealership. The dealer will run a credit score check to ensure that you are capable of repaying the amount that you are borrowing. 

There is no strict rule that buyers with a lower credit score cannot get a 0% interest rate. You might have to prove that your payments will be on-time and in full. A co-signer might be required for you to avail of this offer at some dealerships. A few dealers might require you to make a significant downpayment. 

How To Secure The Best Car Financing Deals?

Does a zero percent interest rate on your loan sound like one of the best ways to finance a new car? Whether your answer is yes or no, there are many other financing options out there that can help you get your dream car. All you need to do is find the lowest vehicle finance interest rate that suits you the best.

  • Get pre-approved before you start a loan application with your bank or online loan provider. 
  • Work towards improving your credit score. A higher credit score improves your chances of getting a better deal with both a bank and a dealer as it increases your credibility and ensures the lender that you will be repaying the loan amount. 
  • Consider buying a new vehicle instead of a new one. 
  • Seasonal promotions and offers are also very common in the automobile market. If you can wait some time to buy a car, you can look out for discounts and other offers that come up before you make the final purchase. 

What To Watch Out For When Getting 0% Financing On A Car?

In the previous sections, we have tried explaining to you what a zero-percent financing option is and how you can get your car with this offer in Canada. Let us now help you identify some points that you must watch out for before you apply for a car loan at a 0% interest rate and end up getting scammed. 

  • Eligibility criteria for approval: is your car dealership offering you a loan at a 0% interest rate without any criteria that you need to meet? Most lenders and dealers will do at least a basic thorough check of your credit score and credit report before approving you for a loan. In case you feel there is something not right, you must avoid the dealership.
  • Check the duration of the financing option you are choosing: make sure that the 0% interest rate is not just a promotional offer for a short duration. With an introductory 0% interest rate, Canada dealerships might try to attract more buyers but it is on you to check the duration of the interest rate before you sign the loan agreement. In case the 0% financing is only a short-term option, you might have to pay a higher amount at a later stage.
  • If your dealership is offering a zero financing option, check the price of the car you want at other dealerships as well. There are some dealers who price the car higher than the common market price and slide them off under the cover of a zero percent financing option. 

0% Financing V/s Cash Rebate

As an alternative to zero percent financing, Canada car dealerships might also offer a cash rebate option to buyers to promote sales. What is a cash rebate? Is it better than 0% financing? Let us understand the same. A cash rebate is a discount of a certain amount offered by the dealer on the total value of your car. This reduces the overall price of the car that you are buying. The interest rate in this case is not zero. On comparing a cash rebate and a zero percent financing loan of the same term, the overall amount you pay for the vehicle will vary. The difference will depend on what cash rebate is offered and what interest rate is charged by the dealer. You can pick the loan option that suits you better by comparing the prices at your dealership. 


It is not very hard to find a zero-interest rate loan in Canada for buying a car. There will always be certain terms and conditions attached to this loan that you must be well aware of before signing any agreements. In the previous sections of this article, we have looked at various aspects of borrowing a loan at zero interest rate when you wish to buy a car. You may or may not find this financing option with your bank but your car dealership will offer you this option. We hope this article would have helped you understand how you can get this loan and will be beneficial for you in applying for the same. 


Before you sign up for zero percent financing to buy your car, you must make sure you understand all the terms of this method and have no doubts regarding the same. Following are some common questions asked by borrowers that we have answered for you to take a look at. This will help you get a better understanding of car loans with 0 interest rates. 

Can I get 0% financing if I have bad credit?

It is not impossible to qualify for a car loan at a 0% interest rate if you have bad credit. You will have to prove that you will be making regular repayments and every instalment will be paid in full by you within the duration of the loan.

What credit score do I need to qualify for 0% car financing deals?

If you need 0% financing deals, the bank or loan provider with whom you apply for the loan will have a minimum credit score requirement. For car financing deals at a 0% interest rate, you will need a minimum credit score of 700. 

Can I get 0% financing on a used car?

Many people prefer buying used cars to save money. The downside is that you cannot get 0% financing on buying a used car

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