What does an auto dealer ad mean by "0 percent financing"?

What does an auto dealer ad mean by "0 percent financing"?

Zero percent financing refers to a special program generally sponsored by the manufacturer, the actual builder of the vehicle, to incentivize you to purchase the vehicle at a very low out-of-pocket cost. It'll be anywhere between 24 to 36 months in general. What it is basically saying is, for that particular time, you're only paying the actual transaction price of the vehicle, broken out over 36 months, with no additional interest charges placed on top. Zero percent financing programs are usually very successful, and they're used as an incentive to push new sales. The only caveat on this is that, in order to get that special financing rate, you usually need to have very high credit scores as well. It's a very select group of buyers actually do qualify for that. But generally, if they have a zero percent financing program going on for Tier 2 and Tier 3 credit risks, they'll also have a low financing rate, maybe a 4.9 or a 5.9. So yeah, obviously if you're borrowing money, you want to pay as little in interest as possible and so zero percent is an attractive option.