I am sure that you have seen them frequently on the television set, especially late at night, when the TV channels seem adorned with advertisements and infomercials galore—you know those zero money down car commercials brought to you by your local dealership, touting a zero interest loan for everybody. Here is a good rule of thumb when it comes to car dealership advertisements on the television: the big print gives and fine print takes away. What I find dreary and downright manipulative about these array of misleading ads, is that they are indeed misleading! Who do you know in your lifetime that has ever gotten approved for a zero interest auto loan? And, even if you happen to know one person, then what about the other hundred that didn’t get approved?

Is this a Form of False Advertising?
I believe that this is a form of false advertising, although I am certain the media agencies will wholeheartedly disagree with me. But when you are advertising as a pitch that you can approve zero interest car loans, and when the statistics show that, at best, one out of every couple thousand of patrons who applies for a car loan will ever even be offered a zero interest rate, then how the heck can you really truly and honestly claim that you are offering zero interest auto loans? Of course, the fact that there is that one in a million lawyer or doctor who can easily afford to pay cash for the car, that may be the one toothpick in the barrel who actually gets approved for a zero interest car loans; its just plain misleading folks.

What Kind of Credit is Required for a Zero Interest Loan?
Basically you need to have flawless, and I mean Hope Diamond flawless credit to even be considered for such a lofty, zero rate. You need to present absolutely no risk to the lender, so they can justify using their balance sheet in your favor. And guess how many people actually meet these very stringent requirements? If you thought less than one percent of society in our country, then you figured a lofty number that is even misconstrued. Maybe, and I mean maybe, half a percent of working Americans meet the strict credit criteria for a zero interest auto loan. And that is really at best folks!

What’s in for the Lender?
So what would ever be in it for the lender by issuing a car loan which offers a zero percentage interest rate? Not very much at all! They will only make money on loan origination fees, and they will not make a cent after that. They tie up their available credit, which could be used to lend money to those who will pay a higher interest rate, even if they have slightly more risk attached to the car loan. But, in some rare cases, auto loan lenders will approve these loans to make use of unused surpluses of cash they have to lend out that quarter. Now how many banks do you know of right now that have these unused surpluses of cash to lend for no profit? Exactly!