Is it possible to get a 0% interest rate for car loan for a used car in the U.S.?

I've been working for 7 months and I just got my first credit card, so I don't have a credit score yet.

I'm planning to buy a car for around $5,000.

Or are there some kind of payment plans with installment option which have a fixed rate without any interest rate? I can pay it off in 3 months.

  • 1
    If you can pay it off in 3 months - why don't you buy it in 3 months? – littleadv Jan 18 '14 at 5:49
  • I'm in need of car right now for commuting to work... and I'm planning to buy a good one if i can.. :) – user1143343 Jan 18 '14 at 5:51

Yes, of course it is. Car dealers are motivated to write loans even more than selling cars at times. When I bought a new car for the first time in my life, in my 40's, it took longer to get the finance guy out of my face than to negotiate and buy the car.

The car dealer selling you the used car would be happy to package the financing into the selling price. Similar to how 'points' are used to adjust the actual cost of a mortgage, the dealer can tinker with the price up front knowing that you want to stretch the payment out a bit.

To littleadv's point, 3 months isn't long, I think a used car dealer wold be happy to work with you.

  • its not really 0% then, is it?:) – littleadv Jan 18 '14 at 22:41
  • Even the "0% financing" that car companies often advertise, in print or on TV, for new cars during a clearance event isn't really 0%, as there's often a "cash rebate" which you're eligible for only if you opt to buy the car outright (they'll accept a bank draft -- "cash" isn't strictly necessary :) i.e. taking the 0% means you're paying an imputed financing charge. Some jurisdictions require this effective rate to be disclosed in the fine print of the ad and/or purchase contract. – Chris W. Rea Jan 19 '14 at 0:57

Is it possible to get a 0% interest rate for car loan for used car in US?

Possible? Yes. It's not illegal. Likely? Not really.

$5K is not a very high amount, many banks won't even finance it at all, regardless of your credit score.

I suggest you try local credit unions, especially those that your employer is sponsoring (if there are any). Otherwise, you will probably get horrible rates, but for 3 months - you can just take whatever, pay the 3 months interest and get rid of the loan as soon as you're able.

  • 5
    5K loan @6% in 3 months would accrue less than $75 in interest. – mhoran_psprep Jan 18 '14 at 12:03

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