Quote:I don't think I can agree with that. In almost any case I can think of, as either a purchaser or definitely during my time as a sales manager, the better interest rate is reserved for the person with a higher credit worthiness. Not the other way around.


In any case, that has little to do with the question posed.

 

You are right in one aspect.  Lower interest rates are in fact offered to those that have good credit.

 

I was leaning towards loans in general, not specifically car loans.  The "$0 down" tactic is most definitely aimed at the lower income/lower credit score person.  Sure the person doesn't have to cough up a down payment and can get a "reasonable" interest rate (not really).  Usually in this case, the person ends up "upside down" for the better part of the loan and ends up paying a much higher price (in this case a vehicle).

 

The "0% interest rate" thing is usually for a limited amount of time over the life of the loan.  Think of it this way.  There are many predatory credit card companies (and some banks) that will offer a "free balance transfer and 0% interest" deal to unsuspecting consumers.  This is mainly targeted at consumers that have debt that they can't handle, and no real savings.  The company is betting that the consumer will not be able to pay their debt in full during the "0% interest" period, and then they can charge a higher amount of interest on the debt.

 

I could be wrong (though I suspect that I'm not), but I don't believe that there is a car dealer that would ever offer a "$0 down, 0% interest" deal over the life of the loan, unless they have over-inflated the price of the vehicle up front.

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