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The Pitfalls of Low or No Interest Loans

Posted on Monday 25th September 2017

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When it comes to buying a car it can be a big choice, they can be an expensive item and deciding on shelling out your hard earned dollars can be a hard one. So when you hear about a 0% interest offer on cars at your local dealer, naturally you would think that sounds like a great deal. There are some things you need to know though.

Car dealers will entice you to buy

Essentially offering low or no per cent on a car loan is an attempt to get your attention, you might have wanted to wait another 3 months for the other car to finally pass its use by date or maybe you want to save more cash for a deposit. When you hear about this great offer though it may motivate you to buy sooner rather than later. In the end most customers are saving more money to reduce the interest they might pay so an offer to pay no or low interest is incredibly tempting and may pull you off that fence you were so comfortable sitting on. The problem is there is a lot more to this offer than you might think.

0% does not truly exist

The contract may state 0% or a low interest rate on it and therefore it is true that you will not pay interest on your repayments that doesn’t mean you aren’t paying for it in other ways. The interest you were supposed to pay is merely transferred to the dealer to pay. They make this back by building it into the ticket price so either way you will pay for it.

The no price negotiation

You may think the next step after going for 0% interest rates is to negotiate on the price however as stated above the cost of the finance has been built into the car so therefore there is very little or no room to move on the price. If the car costs $25,000 then it will be more than likely stay at $25,000. They may try to sell you on the cost saving benefits but unbeknownst to you could buy the same car elsewhere for $20,000 with maybe even with a few extra upgrades. With a good interest rate, you can end up paying less in the long run.

What is the best option?

If you are considering buying but do not want to deal with the common selling ploys above, you are probably considering what is the best way is to go about the process. Kiwi Car loans deal with New Zealand’s best lenders and can arrange a great low interest rate loan so call us on or request a . Our friendly staff have years of experience in the finance industry ad they will provide you with a number of finance solutions completely tailored to your needs.

We compare all of the options for you and do all the running around for you - so you don’t have to.

A Kiwi Car loans pre-approved car loan allows you to shop with confidence and allows you the buying power to negotiate the best price on your next car.

Kiwi Car loans - New Zealand leading finance choice.


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* Interest rate is indicative range only.


6.95% 19.95%

$26,952 Apply Now

* Interest rate is indicative range only.