A record number of new vehicles were purchased with 0 percent auto loan financing in March, according to Edmunds.com. Buyers with good credit took advantage of the no-interest car loan incentives, which will save them hundreds to thousands of dollars over the life of the auto loan.
In March, more than 22 percent of financed new cars were purchased with 0 percent car loans. In March 2009, only 13 percent of new cars were financed with no-interest auto loans. The previous record was 21 percent in July 2006.
Toyota, who offered generous March incentives due to a massive recall and reputation and image problems, was able to finance 71 percent of its buyers of new Toyota vehicles with 0 percent financing. This number is almost double the previous Toyota record of 39 percent in August 2009.
Mazda had the second highest percentage of 0 percent transactions at 58 percent and Mercury was third at 32 percent.
"Credit must be starting to loosen if almost a quarter of all transactions financed in March were approved for 0 percent financing," said Jessica Caldwell, senior analyst for Edmunds.com, in a statement. "Certainly it seems as if Toyota Motor Credit and other ‘captive’ finance companies may have lowered standards to help improve sales."
These amazing auto loan incentives aren’t for every buyer though. If you know you have bad credit, you should be aware that you might not be approved for 0 percent financing.
"Many car shoppers don’t realize that they have to qualify for special financing deals," said Edmunds.com Senior Consumer Advice Editor Philip Reed. "Shoppers should always check their credit score and secure financing from a bank or credit union before setting foot in the dealership so that they have a back-up plan if they get declined when seeking the special deals."
Edmunds.com also reports that partially due to the low-interest auto loan deals on new cars, more than 100 new vehicles currently cost less than their 1-year-old used counterparts.