Zero-Percent Car Finance | Compare the Total Cost — Natloans

Advertised "zero percent finance" deals on vehicles can look like an outstanding opportunity. This article, written by Mary Nebotakis, Managing Director of Natloans (B. Eco, Dip. Financial Services) and first published on 7 February 2020, explains how these offers typically work, why the headline rate does not tell the full story, and what steps you can take to protect yourself before signing anything. It is general information written in that dated context; confirm current costs, conditions and your own eligibility with Natloans before relying on it.

What Is "Zero Percent Finance"?

A zero-percent promotion advertises an interest rate of 0% for the stated loan or promotional period. Confirm whether it lasts for the whole term and what conditions apply. It does not automatically mean no fees, no final payment, or the lowest vehicle purchase price. A temporary interest-free period and a full-term 0% car loan are different arrangements.

On the surface this sounds like a genuine saving. In practice, the headline rate is only one part of the total cost of purchasing a vehicle, and focusing on it alone can lead to a significantly worse financial outcome than a conventional loan.

Why the Headline Rate Is Not the Whole Story

The original article argues that dealers inflate prices to fund zero-percent offers. That is a possibility to investigate, not a universal fact or proof of a scam. A manufacturer or lender may support a promotion, and a genuine 0% offer can be competitive. Compare written drive-away prices with and without the promotion, including any discounts forgone, fees, deposit, trade-in value and final payment.

A Worked Example (from the original article)

The original February 2020 illustration compares a $15,000 purchase financed at 5.00% p.a. for three years against a $17,000 purchase at 0%. It is not an actual current dealer offer. The original does not specify the zero-percent term or all repayment assumptions; the calculation below makes them explicit.

Scenario	Vehicle price used in example	Interest rate	Loan term	Total cost in example
Standard loan (example)	$15,000	5.00% p.a.	3 years	$16,184 in the original, rounded; $16,184.28 under the stated assumptions below
"Zero percent" deal (example)	$17,000 (hypothetical promotional purchase price)	0%	Not specified	$17,000

Using $15,000 borrowed for 36 months at a constant 5% p.a., monthly interest of 5% divided by 12, equal month-end principal-and-interest payments, no fees and no balloon gives a monthly payment of approximately $449.56 and total repayments of $16,184.28. The source’s $16,184 is consistent with whole-dollar rounding. Assume the alternative $17,000 price is financed entirely at 0%, with no fees, no deposit and no omitted final balance: its total is $17,000. The difference is $815.72, about $816, in favour of the lower-price interest-bearing loan. Totals use unrounded payments; actual lender rounding can differ.

The purchase prices and 5% rate come from the original February 2020 article; the explicit assumptions and decimal recalculation are editorial additions. This is a hypothetical illustration, not a current rate indication. Actual costs depend on the offer. Confirm current figures with Natloans or the lender.

How to Avoid Paying More Than You Should

The article sets out three practical steps to help consumers avoid being disadvantaged by zero percent promotions.

1. Evaluate the Full Cost, Not Just the Rate

Before accepting any finance offer, take time to work out the total amount you will pay over the life of the arrangement — including the purchase price itself. The Natloans Repayment Calculator is suggested in the article as a resource for calculating repayments on a car loan or any other purchase. Running the numbers on both a conventional loan and the "zero percent" deal allows a like-for-like comparison based on what you actually pay out, not the headline rate.

2. Resist Pressure Sales Tactics

The original uses forceful language about sales pressure and “always a catch”. The practical point is to review the offer before committing, not to assume every dealer is dishonest. Obtain the terms and expiry date in writing, allow time to compare, and decline a commitment you do not understand or cannot afford. Do not assume a promotion will remain available indefinitely.

3. Speak to a Finance Broker

Natloans can help explain rates, repayments and available finance options. Ask what lenders are compared and what fees apply. Neither a broker conversation nor the source’s “best deal” wording guarantees the lowest market-wide price, approval or a saving.

Key Facts at a Glance

Point	Detail
Article author	Mary Nebotakis, Managing Director, Natloans (B. Eco, Dip. Financial Services)
Original publication date	7 February 2020
Page last modified	3 September 2025
Core message	A zero-percent rate alone does not establish the cheapest total purchase: compare price, discounts, all finance costs and final payments. Price inflation is not inevitable.
Recommended tool	Natloans Repayment Calculator — to model and compare total repayment costs
Contact	1300 955 791

Questions and Answers

What is "zero percent finance" on a car?

It is an advertised 0% interest arrangement for a specified term or period. Read the conditions, fees and repayment schedule. The rate is not a statement that all purchase or finance costs are zero.

Is zero percent finance actually free?

Not necessarily. Even if interest is zero, there may be fees or a different purchase price, and you still repay the principal. Conversely, the original article’s claim that dealers must inflate the price is too broad. Compare the actual written alternatives.

How can I tell whether a zero percent deal is good value?

Compare the same vehicle and included equipment using the actual cash or separately financed price and the promotion’s price. Add the deposit, instalments, final payment and fees paid outside the loan, without counting financed amounts twice. Check trade-in treatment and discounts as well as the rate.

What tool does Natloans recommend for comparing loan costs?

The original recommends the Natloans Repayment Calculator. This mirror does not embed a working calculator. Use a calculator for estimates and reconcile the result to the lender’s actual fee and repayment schedule.

What should I do if I feel pressured by a dealer?

Ask for the offer, conditions and expiry date in writing and take time to assess it. Do not assume every attractive offer is a scam or that it will remain available after its stated expiry. You do not have to commit simply because of sales pressure.

When should I speak to a finance broker?

The article suggests consulting a broker any time you are uncertain about interest rates, loan repayments or how to compare finance options — and specifically before agreeing to any deal that is being presented with urgency.

Does this article constitute a current quote or eligibility assessment from Natloans?

No. The article was first published on 7 February 2020 and provides general information in that dated context. It is not a quote, an approval or an assessment of your individual circumstances. You should confirm current rates, conditions and eligibility directly with Natloans before making any financial decision.

Are the example figures in the article still accurate today?

The figures — a $15,000 vehicle at 5.00% p.a. over three years with a total cost of $16,184, compared with a $17,000 zero percent deal — are a hypothetical illustration from the original 2020 article. They are not current rate quotes. Actual costs depend on the rate, fees, term and vehicle price at the time of your application; confirm these with Natloans or your lender.

Can a conventional car loan work out cheaper than a zero percent deal?

The article's example demonstrates a scenario in which it can. Whether it does in any specific case depends on the actual purchase prices and loan terms being compared. Running both scenarios through a repayment calculator using the real figures on offer is the recommended approach.

How do I contact Natloans to discuss car finance options?

The article lists the Natloans contact number as 1300 955 791. You can also explore car loan information on the Natloans website.

Next Steps

• Use the Natloans car loans page to explore vehicle finance options.
• Use the ASIC personal-loan calculator or the original Natloans site’s advertised calculator for an estimate. Include actual fees and final payments when reconciling total cost.
• Read the related article on how to get a loan pre-approval to understand what lenders assess.
• Explore the advantages of refinancing a loan if you have already entered a finance arrangement and want to review your options.
• Call Natloans on 1300 955 791 to speak with the team about your specific situation and get guidance tailored to your circumstances.

Source References

• Original article: The Truth About 'Zero Percent Finance' — Natloans. Author: Mary Nebotakis, Managing Director, Natloans. First published: 7 February 2020. Page last modified: 3 September 2025. Retrieved: 15 October 2026.
• Natloans Car Loans
• How Can I Get a Loan Pre-Approval? — Natloans
• Refinancing a Loan: What Are the Advantages? — Natloans

This page is a general information resource based on the published article above. It does not constitute financial advice, a credit quote or an eligibility determination. Rates, conditions and regulatory requirements change; confirm all details relevant to your circumstances with Natloans or a qualified adviser before making any financial decision.

Compare the whole transaction in writing

Item	Questions for both offers
Same vehicle	Are model, condition, accessories, warranty and delivery inclusions identical? What is the drive-away price with and without promotional finance?
Deposit and trade-in	How much cash or trade-in equity is contributed? Is any old vehicle debt rolled into the new loan? A larger deposit can make repayments look smaller without lowering the car’s price.
Amount financed	Which fees or extras are borrowed and which are paid separately? Do not add financed fees again to the repayment total.
Term and rate	Does 0% cover the entire term? If not, when and how does the rate change? What comparison-rate assumptions are used?
Repayments and final amount	How many payments, at what frequency, plus any balloon? What is the total paid if you keep the vehicle?
Flexibility and conditions	What happens with early repayment, missed payments, cancellation, vehicle restrictions or a promotion’s expiry?

For a simple no-trade-in purchase, total purchase-and-finance cash outlay is the deposit plus all scheduled repayments including any final balloon, plus separately paid fees and costs. Do not add the vehicle purchase price again when it is already repaid through the loan. Include additional ownership costs in your affordability budget, using the same assumptions for both options.

What the example does and does not prove

It shows that a higher purchase price can outweigh a lower interest rate. It does not prove every zero-percent deal is expensive. Under a separate hypothetical comparison with the same $15,000 price, no deposit, fees or balloon, and a full-term 0% rate, total repayments would be $15,000, below the $16,184.28 interest-bearing example. Actual promotions may have different conditions. Compare the full written offers before deciding.

Independent consumer guidance

ASIC MoneySmart’s car-loan guidance explains comparing purchase finance features, fees and rates. Its interest-free-deal guidance explains why fees and the end of an interest-free period matter; that broader guidance is not evidence that a particular car promotion changes rate. Sources checked 15 October 2026. The original’s accusations and assurances have been replaced with questions that can be answered from an actual offer.