With inflation, rising costs of living and everything else going on in 2022, finding something to feel is giving you a great deal can feel a bit tricky. But there are still some pleasing numbers to be found, such as ‘zero’. There are fewer 0% finance deals on offer this year, but that doesn’t mean you’re out of luck for financing a car without paying interest.
To get the best deals with finance packages you’ll often need to pay quite a high deposit. However, used car prices have risen, so you should get the latest offers from services such as Motorway or We Buy Any Car before talking to dealers.
How can I value my car?
Websites such as Parkers offer valuations; free valuations often go by the year and model of car as a vague idea, but you can pay for more detailed reports taking into account options, service history and mileage. You can also browse cars for sale and have a look at what dealers are asking for cars like yours.
Is APR the most important thing in car finance?
The interest rate is definitely significant, but for many drivers what matters is the fixed monthly cost rather than the value of the asset. Cars depreciate, after all, but as we’ve seen recently that can vary significantly with outside factors. First and foremost is to consider if a dealer or manufacturer contribution to finance is actually reducing the APR. For example, on a £50,000 car with a £7,000 deposit contribution, that may make a headline 5.9% rate closer to 0%.
During times of inflation it’s also worth noting the price of what you are buying may be higher by the time you’ve paid it off. If you need a car now, focus on affordability overall, rather than if it looks like a nice deal on paper. You may need to use a big deposit – if you put that on a credit card and don’t pay it all off at once, that’s going to outweigh the savings fairly quickly.
Even so, 0% finance is always nice to secure, so let’s see what you’ll find.
The best 0% finance deals
Jeep – 0% on Wrangler HP deals
Do you want to buy a Jeep Wrangler without using your savings? If bank interest rates improve then this could be a shrewd move, but it’s a serious commitment to America’s finest 4×4 as you’re taking on an HP agreement for three years with no option to offset the balloon or return the car risk-free. It’s a low risk – secondhand Wranglers hold their value very well. On a car that costs up to £60,000, you need just under £22,000 deposit, paying the balance off at a little over £1,000 a month. Simple maths; divide the cost of the vehicle into the number of payments. Meanwhile you get to keep £38,000 cash working for you elsewhere and still get your Wrangler.
Smaller Jeeps can be bought for lower monthly payments and smaller deposits, but typically attract 5.9% APR.
Renault – short term wins
Renault is a master of the 0% deal and even in these challenging times, it’s offering a selection that will suit most buyers. You can buy an Arkana, Captur or Kadjar for family SUV appeal, or go for a Clio for supermini convenience, but on a two year PCP deal. The deposit is partly paid by Renault in some cases, making these very good value at the moment, but you’ll still need more than a typical lease initial payment.
Residual balloon payments here might mean an even better deal for you though. As inflation and used car demand increase these are likely to be quite conservative, and you could find a healthy deposit contribution towards your next car if you hand this one back – ideal for waiting a couple of years to see where electric technology goes.
SsangYong – long-term strategy
If cars are getting more expensive, there’s one firm that has yet to kick prices upwards. The SsangYong Tivoli and Korando are great value, offering a small SUV from less than the price of a base-spec Fiesta or a larger one for posh supermini money. Better yet, they have a seven year warranty. If you want to control the costs of your car until the next decade it doesn’t get much better than this. However, you do need to pay for almost half the car up front, and it’s an HP agreement over three years so you’ll own the car outright when paid for. Low monthly payments and peace of mind could be worth it if you don’t change cars often.
Volvo – premium without the premium
Like SsangYong and Jeep, you can get 0% if you put down a big deposit. Volvo’s offering 0% APR hire purchase on many models if you pay more than 50% up front, but these are expensive cars to start off with. You may find it more affordable to go through Volvo’s PCP scheme, which includes both finance and retailer deposit contributions that effectively wipe out the 6.9% APR and need a much lower up-front payment. Or you can subscribe to a Volvo which includes more flexibility than even a maintained finance lease and no deposit. These packages aren’t cheap – but they are convenient, and offer flexibility to suit changing needs, circumstances and environment.
Can I get 0% finance on a used car?
As a rule used car finance is less competitive than new, though some car supermarkets and dealers may offer 0% packages on younger cars if stock levels are too high. We’d tread carefully, as used prices vary so much across the country and for specific cars. There’s no sense paying £11,000 for a car because it has 0% finance, when the same car is £10,000 elsewhere and the interest would only be £500.
Look for cashback incentives via sites like QuidCo when applying for finance online, and if trading in don’t forget to value your car independently first.