No such thing… The truth about low interest car finance

 

In today’s new car market, we are seeing low rate finance deals being offered by an ever increasing number of car dealers. Rates as low as 0.50% have been available in recent times.Before you rush out and sign on the dotted line, it’s important to understand what is happening behind the scenes with these low rate finance packages. Firstly, there is no doubt the interest rate being advertised to finance the vehicle purchase is legitimate.However, these finance offers are typically part of what the industry calls a ‘subvention’ finance program as the interest rate for the finance package is being subsidised by the dealer or manufacturer out of the profit made on the sale of the car. Let’s look at a simple example to illustrate how subvention works. …read more

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