How to find the best 0% APR car finance deals

We’d all love to secure interest-free car finance, especially seeing as the interest rates have gone up. Consumer writer Siobhan Doyle shares her top tips for finding a 0% APR car finance deal and things to watch out for.

We’re all keen to keep the cost of buying a car down, particularly now that interest rates have risen and borrowing has become more expensive.

If you’re planning to take out car finance to buy your next car, a 0% annual percentage rate (APR) deal could be one way to keep your monthly payments in check. These offers let you spread the cost of a car without paying interest on the amount you borrow, potentially saving you a significant sum compared with a standard finance agreement.

But how do you find a genuinely good deal, and are there any catches to watch out for? In this guide, I’ll explain how you go about finding a 0% APR car finance deal, the eligibility criteria to look out for and how to make sure you’re getting the best value before signing up.

Remember, you can buy a brand new or used car right here on Carwow. And you can sell your car, too. We’re here to help you through every step of your car-changing journey.

Tips for finding a 0% APR car finance deal

1. Compare deals online

You can save time by using comparison websites to see which manufacturers are offering interest-free finance. Carwow’s 0% finance deals page is a good place to start.

Remember to compare the deposit, monthly payments and overall price of the car rather than choosing a deal based on its headline APR alone.

2. Check manufacturer offers

Car manufacturers regularly advertise 0% APR finance deals on selected new cars. Start by checking the official pages of brands such as Toyota, Skoda and Vauxhall.

These promotions are often time-limited and may only apply to certain models or specifications.

3. Contact local dealerships

It’s worth speaking to authorised dealerships to ask about current or upcoming 0% APR offers. Some promotions may not be widely advertised online, and dealers may have incentives available on specific stock.

Ask which models qualify and whether there are any additional discounts or deposit contributions available.

4. Check your credit score

You’ll usually need to pass credit and affordability checks to qualify for 0% APR finance. Some lenders may have strict eligibility requirements, so a good credit score doesn’t guarantee approval.

Check your credit report before applying and check for any errors that could affect your application. If available, use an eligibility checker to get an idea of your chances before making a full application.

5. Work out what deposit you can afford

Many 0% APR offers require an upfront deposit, which can sometimes be 20% or 25% of the car’s price. Make sure you can afford this without eating into your savings.

Putting down a large deposit will reduce the amount you need to borrow, but don’t overstretch your budget just to secure an interest-free deal.

6. Compare finance terms

Check how long you’ll have to repay the finance and whether the offer is available through Personal Contract Purchase (PCP) or Hire Purchase (HP).

With HP, you generally own the car once all payments and an applicable final fee have been made. Meanwhile, PCP usually gives you the option to pay a final balloon payment to own the car, return it or exchange it, subject to the agreement’s terms and conditions.

What to watch out for with 0% APR car finance

Although paying no interest sounds pretty appealing, there are a few things to check before signing an agreement:

• Strict eligibility criteria: You may need a strong credit history and to pass affordability checks. Not everyone will qualify for the advertised rate.
• Large deposits: Some offers require a substantial upfront payment, so check how much you’ll need to pay before committing.
• Shorter repayment terms: Some 0% APR deals are only available over 24 or 36 months, which could mean higher monthly payments.
• Missed discounts: Choosing interest-free finance could mean missing out on a manufacturer deposit contribution or cash discount available with another payment option.
• Additional costs: Check for administration fees, optional final payments and any mileage or vehicle-condition charges that could apply with PCP.

Most importantly, compare the total amount payable with other finance deals and the car’s cash price. A 0% APR offer isn’t automatically the cheapest option, so make sure the numbers add up before you sign on the dotted line.

Car change? Carwow!

Looking for a new set of wheels? With Carwow you can sell your car quickly and for a fair price – as well as find great offers on your next one. Whether you’re looking to buy a car brand new, are after something used or you want to explore car leasing options, Carwow is your one stop shop for new car deals.

Want to see the latest car content first? Add Carwow as a preferred source here. Click here to follow us on Reddit, where you can keep up-to-date with all the latest news, reviews, advice guides and videos.