How do you get 0 APR for a car loan?

I keep hearing advertisements that say 0 APR. APR is interest, right? Does that mean 0% interest? That seems too good to be true. How can I get a 0 APR car loan?

Answer
It’s a common misconception that interest and APR are the same thing. APR actually encompasses both the interest and fees a lender charges lendees to borrow money.
That said, 0 APR car loans are a great deal! This typically means you won’t be charged interest or fees on the loan so long as you pay it off in full in a specified timeframe (usually 60 to 72 months).
To qualify for a 0% APR loan, you’ll likely need a credit score of 740 or more. These loans are most commonly available through car manufacturers or dealerships, as opposed to banks and credit unions, so you’ll secure financing on the spot when purchasing the vehicle.
Although 0% interest loans can be great, there are some sneaky ways the dealer can add in extra fees. Here are some things to look out for:
  • Sales price: Research the car’s value to make sure the dealer didn’t increase the sticker price to compensate for the loss of interest.
  • Fees: Look over the loan agreement for hidden fees in the contract. If you spot any, ask about them and/or try to negotiate.
  • Unnecessary add-ons: If you don’t want it, say so. Don’t feel pressured to buy things you don’t want or need.
  • High monthly payments: Because you’re getting 0% interest, they may try to up your monthly bill. Make sure this is something you can afford that won’t cause you financial strain.
  • Term lengths: The most common term length for an average car loan is 72 months. Due to depreciation, this can lead to owing more on the loan than the car is worth. Conversely, shorter term lengths can mean higher monthly payments. With 0% APR, the term length might not be flexible, so make sure you can afford the option available.
After getting such a good deal on a car loan, you can make sure you get a great deal on car insurance by using the Jerry app. In seconds, the Jerry app collects quotes from up to 50 top insurance companies, like Nationwide, Allstate, Safeco, Progressive, and Travelers! The average Jerry user saves $879 a month on car insurance.
Lauren Smith
Answered on Nov 18, 2021
Lauren has written for World Nomads, the Matador Network, Korvia Consulting, and once upon a time Three Fates Games. She graduated from Columbia College of Chicago with a BFA in Creative Writing. After graduating, she moved overseas and lived in South Korea where she spent her free time traveling and going on road trips with friends. She misses the rest stop potatoes and is trying to figure out how to recreate them at home. She's now based outside of Chicago and when she's not writing she spends her free time reading, playing video games, and exploring whenever she can.
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