How 0% is really priced
The manufacturer subsidises the finance company's cost of capital in exchange for you paying closer to full list price on the car. Cash buyers on the same model can usually negotiate 8-12% off list price. That 8-12% is roughly what the 0% "saves" you — so it often nets out at zero.
When 0% APR really is free money
On slow-moving models near the end of a facelift cycle, dealers will discount AND offer 0%. If you're getting a headline 8%+ discount on the OTR price AND 0% finance, that's a genuine steal.
The opportunity-cost argument
Even at 0%, financing rather than paying cash lets you keep your savings earning interest (or invested). At current UK savings rates of 4-4.5%, 0% finance is objectively better than paying cash even if you have the cash.
Read the small print on "0%" offers
Some 0% deals require a minimum 30-40% deposit. Others limit term length to 24-36 months. And a few include a small monthly "admin fee" that quietly reintroduces an effective APR. Read the summary box on the offer.
