By Lucy Lazarony
Bankrate.com
July 13, 2004

Interest-free auto deals are hot again. And General Motors and Ford are once again leading the charge.

Automakers looking to rev up auto sales and clear out inventory have rolled out a wide array of interest-free financing offers. Numerous 2004 models are available with zero-percent financing, some with loan terms of up to 60 months.

The deals

Here is a roundup of the latest zero-percent financing deals and cash-back offers.

GM is offering $5,000 cash back or zero-percent financing for up to six years on most 2004 trucks and sport utility vehicles including the Buick Rainier, Buick Rendezvous, Chevy Blazer, Chevy Suburban, Chevy Tahoe, Chevy Tracker, Chevy Trailblazer, GMC Envoy, GMC Yukon, Oldsmobile Bravada and Pontiac Aztek.

GM is also offering $4,000 cash back or zero-percent financing for up to five years on many 2004 passenger cars including the Buick Century, Buick LeSabre, Buick Park Avenue, Chevy Impala, Chevy Monte Carlo and Pontiac Bonneville.

Some 2005 models are already available to consumers, complete with cash-back and zero-percent financing incentives. For example, GM is offering zero-percent financing for 36 months or $1,500 cash back on 2005 models of the Buick Century and Buick Park Avenue.

The offer runs through Aug. 2.

Ford is offering hefty cash rebates and interest-free financing on many 2004 models, including $5,000 cash back or zero-percent financing on the Ford Freestar minivan; $4,000 cash back or zero-percent financing for up to 60 months on the Expedition and four-door Explorer; $3,000 cash back or zero-percent financing for up to 60 months on the Ford Taurus, Ford Crown Victoria, Ford Excursion and Ford Explorer Sport Trac.

Ford is also offering zero-percent financing for 36 months or $1,000 cash back on the 2005 Ford Escape and 2005 Ford Focus.

The offer runs through Aug. 2.

Kia is offering $3,000 cash back or zero-percent financing for up to 60 months on the Kia Optima; $2,500 cash back or zero-percent financing for up to 60 months on the Kia Spectra hatchback; $2,000 cash back or zero-percent financing for 36 months on the Kia Sedona and $1,500 cash back or zero-percent financing on the Kia Spectra.

The offer runs through Aug. 2.

Volkswagen is offering zero-percent financing on 2004 models of the Jetta and Passat through July 31.

Land Rover is offering interest-free loans for up to 36 months on its 2004 Discovery through Sept. 30.

Not sure how to choose between discount financing and a hefty cash rebate? This calculator from Bankrate.com will help you crunch the numbers.

Keep in mind that any car buyer can scoop up a cash rebate, but not everyone qualifies for zero-percent financing. If you’ve got banged up credit or little credit history, you may not qualify for an interest-free loan.

Think price first
Whatever incentive you choose, it's important to negotiate the price of the new car as well as the price of your trade-in.

Autoweb.com, Edmund's Automobile Buyers Guide, AutoSite, Autopedia, Kelley Blue Book and CarPrice.com are among the sites offering timely pricing information. Do your homework.

Be sure to visit several Web sites when researching pricing information. Information may vary from site to site. When in doubt, contact an auto manufacturer directly.

Don't forget to ask about regional incentives in your area. You could save hundreds, maybe thousands, more by snapping up a regional incentive. And some regional offers give you the best of both worlds: a cash rebate on top of a discount financing deal.

As tempting as a dealer's discount financing may seem, don't overlook deals from local banks and credit unions. Bankrate.com's auto loan search engine will help you compare car-loan rates in your area.

It's wise to have an auto loan ready to go before you set foot in a dealership. That way if a dealer wants your financing business, he's going to have to beat the best rate you've found on your own.

Here's one last tip, and it's an important one. It's best to think of a new-car purchase as three separate negotiations: the price of a car, the price of a trade-in and the financing. A car salesman will try to lump this stuff together. Don't let him.

If you do, you might not notice when the purchase price of the car gets bumped up or the trade-in value of your old car gets knocked way down.

Some dealers might even tell you that you can't have zero-percent or any discount financing without paying sticker price. Don't fall for it.

Insist on three separate negotiations and get the best deal you can on each one. Shop as many dealers as necessary to land the deal you want. The best way to land a good deal is to make dealers compete against one another for your business, and to ask the right questions.

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