If you’ve watched much television lately, you’ve likely seen back-to-back car commercials touting 0% financing. As carmakers compete to sell vehicles, nearly all are resorting to “no-cost” financing.

Offers of 0% financing often draw consumers to showrooms, but the results aren’t always good for buyers. “On the surface, 0% financing can sound like a no-brainer,” said Ethan Ewing, the president of Bills.com, a financial advice Web site. “However, consumers must understand that 0% financing is intended to generate foot traffic for dealers as a bait-and-switch tactic, and that it is sometimes not as rewarding as alternative incentive offers.”

In many cases, 0% financing can present a tremendous opportunity for a potential car buyer. However, consumers should always do their homework to ensure that such an opportunity really is what is seems to be.

Some things to consider

For example, the monthly payment on a $28,000 vehicle at 0% interest over 48 months is $583.33. This compares with a $572.52 monthly payment for the same vehicle with a $3,500 cash-back offer and a 6% interest rate over 48 months (not including tax and title fees). Do your research carefully and compare all offers.

“Car buyers should arrive at the dealership as well-armed as possible, with an auto in mind, a set price range, and some idea of your creditworthiness,” Ewing said. “Without this information you are at a great disadvantage.”

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