If you've ever bought a car at a new car dealership, you've probably been enticed with a 0% financing deal. Big auto manufacturers like Ford Canada, Honda Canada and General Motors Canada often offer 0% financing rates on the purchase of new vehicles.

But 0% financing isn't as incentivizing as you might think. Since you’re not giving the bank any reason to lend you money (by paying interest), you might be wondering just how it’s possible to get a 0% car deal? It usually isn’t the bank doing the lending but rather the automaker itself. It’s called captive lending.

The way an automaker makes money with a 0% deal is simple: The money does not get made on financing but rather the price of the car itself. Dealers will try to pad the cost of the car so they make their money back. They might also sell you extras to make up the difference, including extended warranties for your vehicle. Bottom line is, 0% financing isn't the amazing deal it seems like it is.

Also, the cost of financing gets built into the price of the car. If you obtain a 0% financing car deal, you likely will not get any other incentives on top of that. And that means the automaker still pockets a nice profit on the sale of the car despite not making any profit on the financing. You're better off utilizing a more normalized interest rate and taking advantage of other incentives the dealer is offering, or shopping elsewhere.

Dealers use 0% financing to get people into the showroom. But only customers with amazing credit can really qualify. To get 0% financing, you generally need a high credit score. This usually means having a credit score of at least 725, which puts you in the "very good credit" category.

At House of Cars, we're honest with our customers about the financing we offer them. We also aim to educate every customer about their particular credit situation and how we can create a plan for them to overcome their credit challenges. We want every customer who leaves our dealerships to not only understand their unique credit situation, but to feel comfortable with it, as well as the plan going forward!

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House Of Cars works with more than 20+ different lenders to provide automotive financing to our customers. We work hard to ensure your vehicle buying experience is as hassle-free as possible by providing you with unparalleled service with competitive finance rates.

With our exclusive credit rebuilding program, we can create a finance package that’s within your budget and tailored to your needs. When you purchase a vehicle from House of Cars, our team of finance experts will sit down with you and review your credit situation and will provide recommendations to help improve your credit and lower your payments over time. They'll send you home with a personalized plan, showing you exactly what you can do to get your credit score improving as early as your next credit card payment. We want to see you succeed, which is why we take the time to go over your personalized plan with you.

We often see our customers returning after a year or two to trade in their vehicle. When they come back, their credit situation is often a whole lot better and we can get them into an even better vehicle with a lower payment.

Our renowned Credit Rebuilding Program has been used by thousands of customers across Alberta. So once you’ve found the right financing option and started paying back what you owe in manageable installments, not only will you have easy access to the car that you want, but you’ll be building up and improving your credit score for the future!

As a result, we’re widely considered to be the very best place to buy a car with bad credit in all of Alberta. Visit one of our 12 Alberta stores or get in touch by phone or email today to learn more.

The best way to rebuild credit is to get yourself an installment loan. Some effective ways are through financing a vehicle or paying off a credit card. The key is to make your payments on time (this goes for phone and utility bills, as well). By being responsible with an installment loan on a vehicle, the credit bureau will keep track of your efforts and it will prove to the banks that you are trustworthy for future loans. Keep in mind, it takes both time and patience. Make a point to pay your bills on time, and you’ll quickly re-establish your credit.

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How does financing a car work? When it comes to making large purchases like a home or a car, most people don’t have large sums of cash in their savings accounts just waiting around. But if you do in fact have thousands of dollars tucked away somewhere, then there is a clear benefit in putting it towards your car purchase. But there's also benefits to keeping that money in your pocket.

The main benefit of a cash purchase is that you get to avoid paying interest.

If you have the money ready to purchase a vehicle, it might seem like a no-brainer to pay outright and avoid the interest charges, but it’s not always the best option.

The biggest advantage of financing a vehicle purchase versus paying cash is that you can buy the car now without paying a single dollar upfront. 

So what does financing a car mean? Simply put, financing a car means borrowing money from a bank to pay for your vehicle purchase and paying the bank back in manageable installments. House of Cars can offer zero money down payment options*, which are quite popular simply because a lot of people either don’t have the money to put down or have a better use for their savings. Intrigued? Read on!

For the average car buyer, a car loan opens up more vehicle options. When you’re able to borrow the money and pay it back over a manageable period of time, it gives you the opportunity to buy a car you may not have been able to afford if they were paying cash. That Honda you were looking at paying cash for could become a Mercedes-Benz!

But even if you have the savings to pay for that nicer car in cash, financing can be the better decision for multiple reasons:

1. Rather than spending your cash on a car, you can use that cash to invest in other opportunities that will see the money grow, like investing in real estate or investing in stocks, mutual funds or EFTs. The money you make from your investments very well might cover the cost of your monthly car payments, or at least a portion of them! To be rich is to afford a nice car. To be wealthy is to be able to use the same money to invest and afford that same car using the proceeds of their investments.
2. Rather than put all your free cash into a car purchase, it’s important to have enough savings to pay for an emergency expense such as a home or car repair.
3. Buying a car with zero down payment can also free up your income for other debt obligations with higher interest, like high mortgage payments, lines of credit or credit card debt.
4. Did you know that we can often find our customers an interest rate that's cheaper than the interest rate of a line of credit?*

Being smart with your money certainly has its advantages! Keeping your money in your pocket and leveraging it to make more money is the smarter decision than putting it all towards a vehicle, which will lose value over time.

If you decide to pursue financing, it’s best to choose a monthly payment that is manageable for your budget. We can offer auto financing options for every budget. Check out our car loan calculator for a rough idea of what your monthly instalment could look like.

If you’re not sure what amount you can get approved for, you can get pre-approved before you even start the financing process. House of Cars can help you get pre-approved and connect you to dozens of $0 down lenders. Apply with us for free in just a few minutes!

*On Approved Credit