Interest free car finance is offered by some manufacturers on selected new models. Here is what you need to know before you decide.
Soft search with no credit impact*
Borrow between £3,000 and £100,000
Get quotes with no deposit
Representative 19.8% APR. No impact on your credit score. Our partner uses a soft search to give you a quote. If you proceed, a hard search will be conducted which may impact your credit score. ?We're partnered with Car Finance 24/7. As an Introducer Appointed Representative of Carfinance247 Limited (FCA FRN: 653019), we receive a commission if you purchase finance products through the link above. We do not provide advice or make recommendations.
*A soft search has no impact on your credit score. If you choose to proceed with a full application, a hard search will be carried out which may impact your credit score.
0% car finance, sometimes called interest free or zero interest car finance, is a type of offer where you pay no interest on the amount you borrow. This means the total amount you repay equals the price of the car plus any fees, with no interest added on top. In other words, the APR is 0%, so the total you repay is the same as the amount you borrow plus any applicable fees.
These promotions are almost always offered by car manufacturers, not by independent lenders or brokers. The manufacturer subsidises the interest cost as an incentive to sell specific models. It is effectively a marketing tool to shift stock, particularly slower-selling models or outgoing versions being replaced by a new model.
0% finance is almost exclusively available on brand new cars. It is very rare on used or second hand vehicles. If you see 0% advertised on a used car, it is worth looking carefully at the vehicle price compared to the same model at other dealers, as the cost of the subsidy may be built into a higher asking price.
0% finance is typically offered by manufacturers through their own finance arms. Most major brands run 0% promotions at various points throughout the year, usually tied to specific models or trim levels.
The availability of 0% offers changes frequently. A model that has 0% today may not have it next month, and vice versa. These promotions are used strategically by manufacturers and are not a permanent fixture.
Because 0% offers come directly from manufacturers, they are only available through franchised dealers, not through independent car finance brokers or comparison services. Brumble's partner does not offer 0% finance, but you can check what competitive rates you could be eligible for via a soft search with no impact on your credit score.
0% finance offers typically have stricter eligibility requirements than standard car finance. Most manufacturers require an excellent credit score to qualify for a 0 percent finance promotion, so these offers are not usually available to people with poor or adverse credit histories.
They often require a significant deposit, sometimes 20% to 30% of the car's value, though this varies. The term lengths tend to be shorter, often two to three years rather than the five to seven years available on standard agreements. Shorter terms mean higher monthly payments.
Mileage limits on 0% PCP offers can be tighter than standard PCP. Check the annual mileage allowance carefully before signing, as exceeding it will incur the usual excess mileage charges.
You are also limited to the specific models the manufacturer is promoting. You cannot choose any car you want, only the ones included in the current 0% offer.
It is uncommon to find genuine 0% finance on a used car. When it does appear, it is worth being cautious. Some dealers may build the cost of subsidising the interest into a higher vehicle price, which means you end up paying more for the car itself.
Before committing to a 0% used car offer, compare the asking price against the same make, model, year, and mileage at other dealers. If the 0% car is significantly more expensive, the interest saving may be offset by the higher purchase price.
This does not mean all 0% used car offers are bad. It simply means it is worth doing your homework before assuming interest free automatically means cheapest overall.
If you do not meet the eligibility requirements for a manufacturer's 0% offer, or if the car you want is not included in a current 0% promotion, standard car finance through a broker is the main alternative.
Via Brumble, you can check what you could be eligible for via a soft search with no impact on your credit score. Rates start from 9.9% APR, subject to status. Both HP and PCP are available, with no deposit options on many agreements.
Standard car finance also gives you more flexibility. You can choose from over 90,000 vehicles at verified dealers across the UK, rather than being limited to the specific models in a manufacturer's 0% promotion. You can finance both new and used cars, and eligibility does not require a perfect credit score.
If you have bad credit, are self employed, or receive benefits, our dedicated pages have more information about your options.
Wondering how much car finance you can get on your salary? Use our calculator to estimate monthly payments based on the car price, your credit grade and preferred term length.
Check your eligibility for both HP and PCP deals in minutes (Representative 19.8% APR) - with no impact on your credit score. Our partner uses a soft search to give you a quote. If you proceed, a hard search will be conducted which may impact your credit score.
Check Your EligibilityNot the right fit? Check out the other car finance options we cover.
If you are already paying for a car on finance, make sure you are not overpaying on your car insurance too. Comparing quotes from multiple insurers is the easiest way to check you are getting a competitive deal.
Thinking of selling your car? Get a free valuation via our partnership with Motorway.
Common questions about 0% car finance explained.
0% car finance means you pay no interest on the amount borrowed. The manufacturer covers the interest cost as an incentive to sell specific models. The catch is that you typically need excellent credit, a larger deposit, and are limited to specific new models on shorter terms. The choice of car is restricted to whatever the manufacturer is promoting at the time.
It is very rare. 0% finance is almost exclusively offered on brand new cars by manufacturers. If you see 0% advertised on a used car, compare the vehicle price carefully against the same model at other dealers. The interest subsidy may be built into a higher asking price.
Yes, genuine 0% manufacturer offers are truly interest free. You repay exactly the amount borrowed plus any fees, with no interest added. However, the eligibility requirements are strict, and you are limited to specific models. Not everyone who applies will qualify.
Generally, yes. Most manufacturers require an excellent credit score for their 0% offers. If your credit is not perfect, you are unlikely to qualify. Standard car finance through a broker may be a more realistic option, with rates from 9.9% APR subject to status.
The same as any PCP agreement. You can hand the car back with nothing more to pay, pay the balloon payment to keep it, or use any equity as a deposit on your next car. The difference is that you will not have paid any interest during the term, so the total cost is lower than a standard PCP.
You can check what standard car finance you could be eligible for via a soft search with no impact on your credit score. Rates start from 9.9% APR, subject to status. Both HP and PCP are available with no deposit options, and you can choose from over 90,000 vehicles rather than being limited to specific manufacturer models.
EV Zone