Car Deal Canada

0% Interest Car Deals in Canada

0% Interest Car Deals in Canada

The dream of scoring a shiny new ride with 0% interest used to be commonplace, but is it still possible to find no interest car loans in Canada today? This post will uncover the truth about current 0% new car financing deals, who actually qualifies, and what to watch out for with these enticing offers.

We’ll outline everything you need to know about 0% car loans in Canada, including:


  • What 0% financing really means
  • Where to find 0% new car incentives
  • Qualifying criteria and fine print
  • Potential pitfalls to avoid
  • Alternatives if you don’t qualify
  • Pros and cons to weigh
  • Expert tips for scoring the best 0% deal


If you’re hoping to finance your next new vehicle with no interest, read on to learn if it’s still possible in today’s market.

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What 0% Car Loans Really Mean

The term 0% financing refers to a car loan that has a 0% annual percentage rate (APR). This means there is no interest charged on the loan principal over the full financing term.

With a 0% car loan, your monthly payments go entirely towards paying down the principal amount borrowed. You are not paying any extra in interest fees each month. Over the full loan term, this results in substantial savings compared to regular auto loans that charge interest.

For example, if you finance a $30,000 car over 5 years at 0%, your monthly payments would be around $500 (assuming no down payment). Every cent of that $500 would go directly to the loan principal. At the end of the 5 year term, you would have paid $30,000 total and own the car free and clear.

Whereas with a 5% interest rate on the same $30,000 loan, your monthly payment would be around $575. Only part of that payment goes to principal, while the rest covers interest charges. You end up paying over $3,500 extra in interest fees over the 5 years. So 0% financing saves you thousands compared to regular interest-bearing car loans.


Are $0 Down, 0% Car Loans Legit or Just Marketing Hype?

In today’s auto market, enticing offers of $0 down and 0% interest car loans seem too good to be true. Unfortunately, the reality is these rock bottom financing deals are more marketing hype than legit savings for most buyers.

It’s true that automakers and dealerships periodically offer 0% APR financing promotions, but they are almost always limited time offers. This differs from standard low interest rate auto loans that stay consistent over longer periods.

For example, certain models may have 0% interest deals that only last for certain months or until dealer inventory sells out. This creates a sense of urgency for customers to act fast before the deal expires.

In addition, the 0% interest is not automatically given to all buyers. There are often very stringent credit score requirements to qualify for zero percent financing. For example, you may need a FICO score of 720 or higher.

Having little or no credit history can also disqualify you from 0% auto loans. Lenders want to see you have successfully managed debt in the past before they will approve a no interest car loan.

There is also fine print attached to these promotions. You may be required to make a down payment after all, or trade in a vehicle you currently own. There could be limits on the loan length, vehicle MSRP, or models eligible too.

Dealers lure customers in with enticing 0% interest advertisements, but ultimately very few buyers actually qualify for these unicorn no interest car loans in Canada today.


Where to Find 0% Financing Deals in Canada

While 0% financing incentives aren’t as widespread as they once were, some specific brands and models are still running promotions from time to time that offer no interest. Here are some of the car manufacturers that have been known to offer 0% new car financing deals in Canada:


  • Ford – Certain Ford models like the Escape, Explorer, F-150, and Super Duty trucks periodically offer 0% for up to 72 months.
  • GM – Brands under GM such as Chevrolet, Buick, and GMC provide 0% financing on select vehicles. Watch for deals on trucks, SUVs and sedans.
  • Chrysler – The Chrysler, Dodge, Jeep and Ram brands promote 0% interest offers on popular models.
  • Toyota – Occasionally provides no interest financing on slower selling vehicles.
  • Hyundai/Kia – Entry-level cars and SUVs sometimes have 0% for short time frames.


The best way to find current 0% new car financing promotions is to check manufacturer websites and your local dealership sites directly. Offers are usually only available for a limited time, so it pays to stay on top of the latest incentives.

Once you locate a 0% deal on the specific car you’re interested in, be sure to read all the fine print and calculate payments carefully. 0% financing doesn’t automatically mean your loan will be payment-free. There is often still a monthly payment required, it just means you aren’t charged any interest on top of the principal loan amount.

Use an auto loan calculator to estimate your monthly payment based on the 0% interest rate, length of loan term, taxes and fees. This will help you determine if the 0% financing deal truly provides the savings you expect. Keep in mind you may need to negotiate the vehicle price separately from the advertised rate offer.


Do You Actually Qualify for No Interest Car Financing?

Scoring 0% interest on a new vehicle purchase often requires meeting strict eligibility criteria. Auto manufacturers and dealerships carefully assess applicants to ensure they will qualify for top-tier financing rates.

Here are some of the key factors lenders evaluate to approve buyers for zero percent car loans:


Credit Score Requirements

Excellent credit is usually mandatory for zero percent financing deals. You’ll often need a FICO score of 720 or higher to qualify. Some offers may require a minimum score between 680-700, but the best rates go to those with scores in the mid-700s or higher.

Lenders need to see a strong history of on-time payments and responsible use of revolving credit. A few late payments or collections accounts could disqualify you from zero percent interest offers.


Down Payment and Trade-In Rules

Putting more money down upfront improves your chances of scoring 0% financing. Most deals require at least 10-20% down, either in cash or through a trade-in vehicle.

Having a vehicle to trade in also shows you can manage auto loan payments responsibly over time. Lenders prefer financing a smaller portion of the total vehicle price to minimize default risk.


Income and Debt Ratios Assessed

Lenders verify your income sources and expenses to confirm you can afford the monthly payments. Expect your debt-to-income ratio to be analyzed, along with factors like your job stability and length of employment.

Those with the highest incomes and lowest existing debts tend to have the best shot at zero percent new car financing approval.


5 Potential Pitfalls of 0% Car Loans to Consider

While 0% financing deals may seem too good to pass up, it’s important to be aware of the potential downsides before signing on the dotted line:


Higher Sticker Prices and Hidden Fees

To offset the costs of providing free financing, dealers will often inflate the base price of vehicles or tack on extra documentation fees. This allows them to build the “cost” of 0% interest into the sale price. Be sure to negotiate the best price possible before discussing finance terms.


Prepayment Penalties

If you want to pay off your 0% car loan early, you may face prepayment penalties, sometimes in the thousands. Make sure you understand the rules before signing the contract, as these fees can negate the savings from interest-free financing.


Mandatory Add-Ons to Qualify

Dealers may require you to purchase extended warranties, rust protection, or other extras to be eligible for 0% financing. Factor these mandatory add-ons into the total loan amount to determine if it’s still a good value.


Risk of Higher Interest Later

Introductory 0% interest deals often jump to standard rates after a short period, which can be 10% or higher. This leads to much larger finance charges down the road. See if you can qualify for regular low rate financing instead.


Alternatives If You Don’t Qualify

If your credit score or income falls short of qualifying for 0% new car financing, there are still ways to get favorable rates and avoid paying excessive interest:


Low Rate Bank Loans

Banks and credit unions may offer more flexibility than dealers on auto loan rates, even if they can’t match 0%. Shop around for the best fixed or variable rate loans. Banks also are more likely to work with you if your credit is marginal.


Consider Buying Used Instead

You’ll have more leverage negotiating the price on a used vehicle. And with a larger down payment, banks can provide better interest rates on used cars. Opting for a quality pre-owned model just a few years old can mean big savings.


Shop Competitor Deals and Negotiate

Don’t settle on the first rate a dealership offers. Check for lower rates on similar models at other dealers. Negotiating with multiple offers in hand can help you secure the lowest competitive rate.


How to Get the Best 0% Financing Deal

Scoring the lowest 0% interest rate and payment requires strategy. Follow these steps to maximize your chances and savings:


Improve Your Credit Score

One of the biggest factors determining 0% financing eligibility is your credit score. In general, you’ll need good to excellent credit of 720 or higher to qualify. Review your credit reports from Equifax and TransUnion for any errors dragging your score down. Pay off credit card balances and resolve late payments. Aim for at least a 760 FICO score if possible.


Research Lender Requirements

Every auto manufacturer and lender has their own standards for approving 0% interest. Study the official offers to understand the minimum credit score, income, down payment, and other rules. This will help you target promotions you’re most likely to be approved for.


Negotiate Additional Discounts

On top of 0% financing, look for ways to lower the vehicle price. Consider taking advantage of loyalty rebates, trade-in bonuses, or manufacturer incentives. Ask the dealership if they can beat competitor offers or throw in extras like warranty coverage. The more you can negotiate off MSRP, the lower your 0% loan amount will be.


Calculate Your Monthly 0% Car Loan Payment

One of the best ways to determine if you can truly afford a 0% interest auto loan is to calculate what your monthly payments would be. Online auto loan calculators make it easy to estimate your payments by inputting a few key details.

Auto loan calculators require you to enter:


  • Vehicle price
  • Down payment amount
  • Loan term length (in months)
  • Interest rate


With a 0% rate, the interest cost portion disappears, leaving just the principal to be paid off. This results in lower monthly payments compared to standard financing. Let’s look at an example:


Vehicle Price: $30,000

Down Payment: $5,000 (17%)

Loan Term: 60 months

Interest Rate: 0%


Plugging this into a car loan calculator shows the monthly payment would be around $417.


Now compare that to a common 6% interest rate while keeping the other factors equal:


Vehicle Price: $30,000

Down Payment: $5,000

Loan Term: 60 months

Interest Rate: 6%


The monthly payment jumps to $530 – a difference of $113 per month!


Use an auto loan calculator to experiment with various scenarios and determine if a 0% interest car loan results in a payment you can manage.


Frequently Asked Questions

Here are some of the most common questions about 0% financing car deals in Canada:


Are 0% interest car loans really free money?

No. Even though 0% financing has no interest charges, you still have to pay back the full loan amount. The interest is essentially baked into the purchase price.


Who qualifies for 0% car financing?

To get approved, you’ll typically need strong credit (scores of 720+), a solid income, minimal debts, and a sizable down payment. Requirements vary by lender.


How long do 0% car loan promotions last?

Most 0% deals only run for short time periods, usually a few months. So if you see an enticing 0% offer, act fast before it expires.


Can I get 0% financing on a used car?

0% loans almost always apply only to select new car purchases. While used cars may have low APR promotions, 0% interest is rare.


What are the catches of 0% auto financing?

Watch for higher sticker prices, prepayment penalties, and mandatory add-ons required to qualify for 0%. And rates may jump up later.


Pros and Cons of 0% Car Loans

Like any major financial decision, there are both advantages and drawbacks to zero percent auto financing offers that are important to weigh.


Pros of 0% Car Loans

The main benefits of scoring 0% interest on a new vehicle purchase include:


  • Pay no interest charges over the loan term – With 0% APR, 100% of monthly payments go toward paying down the principal
  • Lower overall loan costs – 0% financing saves money compared to regular interest rates
  • Fixed, predictable monthly payments – With no interest, payments remain the same over the full loan term
  • Opportunity to buy more car – 0% deals allow financing a more expensive vehicle for the same monthly payment
  • Build credit – Can help establish positive payment history and credit mix


Cons of 0% Car Loans

Potential disadvantages of 0% new car financing to be aware of include:


  • Short promotion periods – Deals typically only run for a limited time
  • Strict approval criteria – Excellent credit score required to qualify
  • Higher sticker price – Dealers may inflate base price to offset 0% incentive
  • Prepayment penalties – Paying off loan early may incur fees
  • Alternative offers – Other low rate promotions may be better overall value


Weighing the pros and cons can help determine if zero percent financing makes the most financial sense or if a different loan offer is preferable for your situation.


0% Car Loans vs Low Interest Loans

When shopping for a new vehicle, buyers are often tempted by 0% financing deals offered by car manufacturers and dealerships. But are no interest loans really better than alternatives like low rate financing from your bank?

There are pros and cons to weigh for each option:


Pros of 0% Car Loans

  • Pay no interest charges over the loan term
  • Lower monthly payments than low rate loans
  • Incentives and discounts may come bundled with 0% offers


Cons of 0% Car Loans


  • Rarely available and for short promotion periods
  • Strict qualifying criteria based on credit score, down payment, etc.
  • Vehicle prices may be marked up from MSRP
  • Limits on loan term length and amount financed


Pros of Low Interest Car Loans


  • Interest rates typically 2-5%, competitive with 0%
  • Approval based more on income and debt ratios
  • Can negotiate vehicle price without special offers
  • No prepayment penalties if paying off early


Cons of Low Interest Loans


  • Pay more in interest charges over the loan term
  • Higher monthly payments than 0% financing
  • No additional incentives like cash rebates
  • Interest rate subject to change over loan term


When choosing between 0% and low rate financing, buyers should calculate total loan costs factoring in interest, fees, loan terms, and vehicle price. Pre-approval for both options provides leverage to negotiate the best possible deal.


When to Avoid 0% Financing Offers

While 0% financing promotions can seem appealing, they may not always be the best option. Here are some key times you may want to steer clear of no interest car deals:


If Mandatory Add-Ons are Required

Some 0% offers require you to purchase extra products or services to qualify, like extended warranties, rust protection, or GAP insurance. This drives up the total price you pay. Be wary if you have to add on extras you don’t necessarily want or need just to get the 0% rate.


With Prepayment Penalties

Read the fine print – some 0% loans slap you with hefty fees if you pay off the balance early. This restricts flexibility. Avoid 0% deals with prepayment penalties, as you may want to pay more or pay off the loan quicker to reduce interest costs over time.


With Poor Credit

Those with lower credit scores may still qualify for 0% financing, but the rates tend to be short-term introductory offers. This means the interest can jump sharply higher in as little as 6 months. If you have poor credit, a low fixed rate loan may be safer than a teaser 0% rate that won’t last.


Expert Tips for First Time 0% Financing

If you’re considering a 0% auto loan for the first time, keep these expert tips in mind to score the best possible deal:


Research Lender Requirements

Every lender and auto manufacturer has different qualifications for 0% financing offers. Carefully check the requirements before applying. Most require very good to excellent credit scores of 720 or higher. There may also be income, debt-to-income ratio, down payment, and trade-in minimums.


Understand All Terms

Read the fine print! 0% interest loans often come with catches like shorter loan terms, large down payments, or prepayment penalties. Make sure you understand the full terms and do the math on total costs.


Improve Credit First If Needed

If your credit score falls below the lender’s requirements, take steps to improve it before applying. Pay down debts, correct errors on your credit report, and keep balances low. A score of at least 700 should qualify you for most 0% new car financing offers.



While enticing 0% financing offers may seem too good to be true, they are still possible for some buyers in Canada today. However, qualifying is limited and the deals come with fine print. By researching current promotions, understanding your budget, having excellent credit, and negotiating well, scoring no interest terms is achievable.

As we covered, a select few automakers like Ford, GM, and Chrysler have 0% specials, but only on certain models for brief time periods. You’ll generally need strong FICO scores above 700 and solid income to debt ratios. Consider all the potential pitfalls as well, from inflated pricing to early repayment penalties.

For most, low rate financing from 1-3% will be more realistic. And alternatives like buying used, leasing, or paying cash should be weighed too. While 0% interest is rare, doing your homework can help find the best possible rate and payment on your next new vehicle.

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Questions About 0% Interest Car Deals in Canada

0 interest car deals in Canada refer to car financing offers from dealerships and manufacturers where you pay 0% interest over the term of the loan. These deals allow buyers to finance a new or used car purchase without paying any interest fees on the loan itself. The offers are usually only available on select models and for certain periods of time as set by the automaker or dealership.

The car brands that currently offer 0% financing deals in Canada include Ford, GM (Chevrolet & GMC), Chrysler, Audi, Kia, Hyundai, and Volkswagen. The offers vary by specific models in their lineups and have certain restrictions. You’ll need to have strong credit to qualify for 0% financing from most manufacturers.

To qualify for 0% car financing in Canada you typically need to have a very good credit score of 720 or higher. You also may need to meet certain criteria set by the automaker such as being a recent university or college graduate, current student, or member of the military. The vehicle you choose must be an eligible model being offered at 0% rate by the automaker.

Some of the catches with 0% car loans in Canada include:


– Very short loan terms, usually 36 months or less

– Large down payments required, sometimes 20-30%

– Only applicable on select models, not entire lineup

– Must have excellent credit to qualify


The deals reduce the total finance charges but can still require big upfront payments. You need to read all the fine print to understand restrictions.

No, 0% car financing deals are not actually free car loans. There is no such thing as free money, so the incentives are built into the overall price you pay. Automakers offer 0% financing to incentivize customers with rates lower than the market, but they earn their profit in other ways. You may not get as large of a cash rebate or discounted purchase price when opting for 0% rate.

Whether you take a cash rebate or 0% financing offer depends on your financial situation. Calculate the total amount of interest you’d pay over the loan term and compare it to the rebate amount. If you can pay off the loan quickly or invest the rebate to earn a higher return than the interest rate, the rebate may provide more overall value.

The best place to find 0% car financing deals in Canada is on the official websites for major automakers that offer vehicle sales in Canada. Most have dedicated web pages showcasing their current incentives and promotional offers. You can see all the details on eligible models, terms for 0% financing, and more. Checking sites like CarCostCanada can also help find best rates.

Besides 0% car loans, other low financing options that exist include:


– 1.9% APR deals from some brands

– Subvented rates from manufacturers below market rates

– Discounts off current loan rates for qualifying buyers

– Secured car loans using home equity as collateral


Rates change regularly, so check automaker sites for their latest financing options to save money on interest.

Dealer financing often provides lower rates on new cars to help incentivize vehicle sales, while banks may offer better rates on used cars. Pre-approving your loan with a bank or credit union before negotiating can give you extra leverage to secure the best possible rate. Compare all loan estimates to make the right financing choice for your budget.

When taking a 0% car financing deal, you still need to watch out for extra fees that can get tacked onto the loan including:


– Documentation fees

– Lien registration fees

– Extended warranty costs

– GAP insurance premiums

– Dealer prep charges


Ask for a full breakdown of fees and the out-the-door price before signing your contract.

Yes, students and recent graduates can qualify for 0% financing deals from some automakers in Canada. Brands like Ford, GM, and Volkswagen offer “student bonus cash” discounts or low APR financing to enrolled students or grads from the past 6-12 months. Proof of current student status or a copy of your diploma is typically required.

Most 0% financing offers from manufacturers are only valid on select new car purchases, not used vehicle sales. However, some dealerships may run their own 0% financing promotions on certain used cars in stock to spur sales. These are less common than new car offers but can provide great savings on interest.

Yes, 0% financing may also be offered on vehicle lease offers as an alternative to traditional car loans. The deals allow you to lease a new vehicle with a lower money factor, which is equivalent to 0% interest. Your monthly payments are reduced throughout the lease term.

Realistically, the lowest new car loan rate you can expect to get from a bank today is around 3-5% for buyers with excellent credit. Some buyers may find 2-3% from credit unions. With manufacturer subsidies, you can sometimes get 0-2% financing but average rates are higher. Used car loans are typically 5-15% based on age, mileage, price, credit score.

0% car loans are generally safe financing options when you understand all the terms and can afford the payments. Risk increases if you stretch your budget too thin just to get the 0% rate or fail to build equity before the loan period ends. Avoid very long repayment terms and read the fine print to make sure it is the right deal.

Most automakers restrict 0% financing deals to repeat customers only, meaning first-time buyers often cannot qualify. However, some brands offer additional rebates for first-time buyers that can be applied on top of low APR deals around 1-3%. Look for special incentives exclusive to new car buyers with no existing brand loyalty.

To qualify for 0% car financing from most manufacturers in Canada, you typically need a minimum credit score of 720 or higher. Some luxury automakers require scores over 750. Banks may approve loans with 0% dealer incentives at scores around 680, but incentives are lower with a higher rate.

Tips to ensure you get the best possible car loan rate include:


– Maintaining an exceptional credit score over 750

– Considering pre-approval offers from multiple lenders

– Comparing rates across competing dealerships

– Negotiating your rate down using offers or incentives

– Opting for shorter loan terms so you pay less interest


Shopping around, not showing all your cards upfront, and leveraging competitive offers will help secure the lowest rate.

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