Is zero per cent financing legit?

Lately, a few customers at Castlegar Hyundai have asked, "Is Hyundai's zero per cent financing 'true' zero per cent financing, or is there a catch?"

I wasn't sure what to make of these concerns. So, I did a little research to see what people have been reading about zero per cent. I can see why people are skeptical. If you Google "zero per cent financing" you will read numerous complaints and conspiracies about zero per cent financing. Some examples:

Zero per cent is only available for short term loans and you need a very large down payment.

Maybe this is true for some brands, but Hyundai Canada offers zero per cent up for six, even seven years on several models. Generally, zero per cent is less common on newly-introduced models, but there are exceptions. There is renewed competition in the automotive industry right now, so we are seeing zero per cent or very low rates on a wider selection of vehicles. A prime example is the 2012 Hyundai Elantra, recently named North American Car of the Year. As for the down payment, there is no requirement to plunk down 25% or 50% up front just to get zero per cent.

Dealers will increase the price of the vehicle, and even add extra fees, if you take zero percent.

This could be a U.S. thing, but we don't claw back any money or charge extra if a client chooses zero per cent. To offer this finance rate, Hyundai Canada pays for the difference between the prime rate and zero per cent. This subsidy or discount from Hyundai can amount to thousands of dollars in savings to customers. But Hyundai does not entice people with the offer of zero percent, only to charge more in extra fees.

Zero percent just is a 'teaser' rate and the percentage will suddenly increase.

The reality: when you buy a Hyundai with zero percent, it stays at zero percent for the full term of the loan. We leave those kinds of tactics to predatory credit-card companies.

It's hopeless! Only the wealthiest car buyers are eligible for zero per cent.

To finance a vehicle, you need a reasonable credit rating, of course. But the majority of customers at Castlegar Hyundai qualify for this offer. Zero per cent is not the exclusive domain of the rich and famous.

Overall, much of the commentary on zero per cent revealed deep suspicion of the auto industry. We get that. It is always important to read the fine print, ask plenty of questions and get to the facts when making a major decision. But many of the conspiracy theories about zero per cent don't endure closer scrutiny. At Castlegar Hyundai, we provide several options for financing a vehicle and customers can choose what is best for them.