loans.com.au - New/Demo - Variable Rate
variable rate
comparison rate
0 interest car loans or new car loans at a 1% p.a. is usually offered by dealers or manufacturers.
At first glance, this offer is as it appears. You purchase the car at the advertised price and then make monthly repayments on the principal of the car without any interest being applied to it.
However, while it may sound like a good deal, there are a number of things you should be aware of before committing to a 0% car loan.
Interest-free car loans are offered by dealership financiers and are generally used as a sales tactic. While you won't pay any interest on the loan, you may not actually be saving any money compared to a normal car loan. The dealer may be charging you a higher price for the car, or adding on extra fees and charges that end up costing you more than any interest repayments would. This will also generally be true of deals offering 1% finance, as the total cost of the loan may still be greater than a regular car finance option that charges a higher rate.
The 0-1% interest may also only be offered for a certain period of time, after which the loan reverts to a higher interest rate. You may also be required to make a large lump sum payment at the end of the loan, called a balloon payment, that will lower the size of your repayments but may be harder to budget for.
As with any financial product, it's important that you understand the terms and conditions of any 0% car loans you may be considering, and you should always compare a range of different loans to find the finance option that's right for you.
Here are the main points to keep in mind:
Car manufacturers may offer no-interest – or 0% car finance – deals through their dealerships in order to entice new business. It is very unlikely to find a traditional lender offering a car loan with a 0% or 1% interest rate.
0% and 1% finance offers come and go - manufacturers run them on selected models for limited periods, so check the manufacturer's own offers page before you assume a deal isn't available. The table below shows examples of manufacturer finance offers and the dates they ran to.
| Manufacturer | Comparison Rate | Max. Loan Term | End Date |
|---|---|---|---|
| Chery Tigo 7 Pro | 1.88% p.a. (10% deposit required) | 36 Months | 30/09/2024 |
| Cupra (New Vehicle) | 1.9% p.a. | 36 Months | 30/09/2024 |
| Cupra (Demo Vehicle) | 3.9% p.a. | 36 Months | 30/09/2024 |
| Tesla Model 3 | 3.57% p.a. | up to 5 years | 30/09/2024 |
Where a 0% finance offer is available, these are the points worth weighing up before you sign.
Before you lock yourself into this type of arrangement, you should always compare a range of loan products. While paying 0% or 1% interest on your car finance may seem the best option, this will not necessarily be the case and you may be able to save money by using a regular car loan.
We currently don't have that product, but here are others to consider:
How we picked theseTo make comparing car loans even easier we came up with the Finder Score. Interest rates, fees and features across 200+ car loan products and 100+ lenders are all weighted and scaled to produce a score out of 10. The higher the score, the more competitive the product.
This used car loan offers a competitive minimum interest rate from 6.19%.
A review of Verified Lending's Used Car Loan. Find out if this loan is right for you.
A top-rated car loan with a competitive minimum interest rate and no ongoing monthly fees.
Want to buy a classic car but don't have the ready money? There are still financing options available for classic vehicles. Find out what loans you have to choose one and which one will work best for you.
Want to drive with Uber but don't have a car? Here's what to do.
Find out the extent of Australia's Tesla Supercharger network with our complete map of every charging station.
A highly-rated car loan that features a competitive interest rate and no ongoing monthly fees.
The novated lease calculator calculates your expected repayment amount, helping you better manage your current loan or plan a budget to pay a future novated lease.
Find out the range of RACV Car loans available for you to compare. You can finance a new car and lock in a competitive rate for your loan – find out about all the fees and features that come with this loan to apply today.
