0% APR best car finance deals: full list of latest December 2023 deals

Getting a car with 0% APR finance - also known as interest-free credit - is one of the simplest ways to pay for a new car. The cost of the car is split across a deposit, a series of monthly payments - and in the case of PCP finance, an optional final payment as well, which you make at the end of the contract if you want to keep the car. This means that whether you opt for PCP finance or Hire Purchase, the cost of the car is cut into bitesize chunks, with nothing charged for the finance.

Unlike most car finance offers, there are no interest charges associated with 0% APR deals. This means the sum total of your payments should add up to no more than the full cash price of the car. Just remember that with PCP finance you have to make the large optional final payment - which could amount to half of the initial price, or even more - as well as the deposit and monthly payments to take ownership. Even with 0% APR PCP finance, though, the total amount you pay, including the optional final payment, equates to no more than the initial price.

A 0% APR deal might not be as good value as it seems, however. While you don’t pay interest on the finance, the fact that new cars lose their value very quickly means that a 0% APR deal can still be expensive and cost much more than a nearly new or second-hand equivalent. As a result, even an interest-free deal on a new car could end up being notably more expensive - overall and in monthly payments - than a finance deal on a one- or two-year-old equivalent where interest is charged.

So when you’re shopping around for the best deals, it’s worth getting like-for-like finance quotes (with the same type of finance, deposit amount, contract length and mileage allowance) on both new cars and equivalent nearly new or used models. Then you can directly compare the monthly payments to see which option offers you the best value.

Best new cars with 0% finance

• Ford
• Renault
• Skoda
• SsangYong
• Volvo

For instance, you could finance a one-year-old Citroen C1, which has only covered a couple of hundred miles with a cash price of £10,000 that is available with 6.9% APR finance. Yes, that finance arrangement includes interest, but compared with a £13,000 new equivalent with 0% APR and otherwise like-for-like terms (a three-year Hire Purchase finance deal with a £1,000 deposit), you could still save £30 per month by going for the used car. Go for an older car and the savings are likely to be substantially higher.

If you're open to going used to get the most affordable car finance, have a look at some of the used car finance deals available now on BuyaCar.

Used cars with 0% finance

Used cars aren't generally available with 0% finance because they don't benefit from the same manufacturer finance discounts as new cars. However, the used car finance industry is competitive, which keeps interest rates low.

Some retailers, including BuyaCar, work with several lenders to ensure that you get a competitive quote for your circumstances, along with a good value cash price to begin with - which means you might be able to get more car for your monthly budget than you might expect.

• New cars for under £150 per month
• New cars for under £15,000

So while you can't typically get 0% APR with used cars - and where you can, it's likely the cash price has been inflated to cover the fact no interest is charged - going for a nearly new or used car, or even a pre-registered car, is typically far cheaper than going for a new car. That can be the case even where there is a really good new car finance deal on offer, so as always, it's worth getting a couple of like-for-like quotes to find the best car you can get for your budget.

Best new cars with 0% finance: September 2023

Ford 0% new car finance deals and offers

Ford often offers its cars with 0% finance, however it has been hit and miss in the past 12 months. But things are picking up with finance offers on a range of models, including the Fiesta (which is offered with a low APR, rather than 0%) that's now officially being run-out and not replaced, with plenty of hybrid and electric models also included.

Just be sure to check whether the model you're interested in is included in the offer, because some engines and trim levels may be excluded.

Renault 0% new car finance deals

Renault has a long history of offering interest-free credit agreements. There are 0% PCP offers on most of its range, with the exception of the new Megane E-Tech electric SUV. The finance runs for two years, with interest introduced on its three- and four-year plans.

Skoda 0% new car finance deals

Skoda's current 0% finance offer extends to its three SUVs on a PCP plan. At least 30% of the car's cash price should be put down as a deposit, and you'll need to pay it off within 36 months.

SsangYong 0% new car finance deals

SsangYong is best known for its rugged off-road vehicles. Two of its smallest models are also available for interest-free HP agreements, which can be spread over three years. However, they both require a hefty 50% deposit.

Volvo 0% new car finance deals

Volvo is currently offering 0% finance plans on most of its range, with the exception of plug-in hybrid and electric versions of its XC40 and C40 crossovers. Like the SsangYong models above, Volvo requires a large 50% deposit and extends its finance to 36 months.

Volvo XC40

BuyaCar prices from £16,058
Monthly finance from £242.27*

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Types of finance available with 0% APR

It’s possible to find deals on multiple types of finance with 0% APR. The most common is Personal Contract Purchase (PCP). This offers affordable monthly payments, as these only cover the amount of value the car is expected to lose over the contract, rather than its whole price. At the end of the contract, you can either return the car to the finance company, or buy it for a pre-agreed optional final payment.

Another potential option is Hire Purchase (HP), which ends in you owning the car once you've made all the monthly payments. Because there is no large optional final payment, monthly payments are a little higher with HP than with PCP, since you have to pay for the entire value of the car through the monthly payments.

This also means that you don't need to find many thousands of pounds to pay off that large final payment if you want to take ownership, though you are able to refinance this into another finance contract, should you wish. Do bear in mind that you are very unlikely to be able to refinance a PCP deal with 0% APR, so you are likely to have to pay interest on the money borrowed on the second finance contract if you choose this option.

Meanwhile, if you're after the best value option and are happy to consider a nearly new or used model, you can kickstart your car finance journey with BuyaCar to see how much you can afford to borrow and find a great deal among thousands of used cars currently available now on our search pages.

0% finance: things to consider

Before you dive into the list of new cars available with 0% APR finance, though, consider your other options:

• Getting this rock-bottom rate often requires a large deposit, so you may need to spend a chunk of your savings to access one of these deals. Interest-free agreements aren't usually available with no-deposit finance.
• 0% finance offers may not include savings available with other finance deals (like deposit contribution discounts), so you could end up paying more overall. To find out which offers you the best value, get like-for-like quotes with the same deposit, contract length and mileage allowance to see which has the lowest monthly payments and costs you less overall.
• 0% APR car finance is generally only available for new cars. Where it is available on used cars, this typically means you'll be paying an artificially high cash price, as dealers often inflate the price to cover what they lose by not charging interest. Consequently, 0% APR used car finance can actually be more expensive than equivalent finance deals on similar cars that charge interest but offer much lower cash prices. Get like-for-like finance quotes to find out which offers you the best value.

Scroll down for all current 0% finance deals, arranged alphabetically by brand, or see below for our pick of the best deals.

0% APR finance: how it works

APR stands for annual percentage rate. It’s a standard way of calculating the full cost of finance and takes into account the interest charged on borrowing, as well as any fees. This makes it easy to compare the cost of finance between different providers.

If finance is advertised as 0% APR, then it means you won’t be charged any interest or fees. This should mean that the overall amount you pay is no greater than if you had bought the car you’re considering outright in cash.

A 0% APR offer often doesn’t take into account the discounts available in other forms of new car deals, however. For example, a manufacturer 0% APR offer may not include a deposit contribution or other discount incentive, so you’ll repay the full retail price of the car as advertised in the brochure.

If you’re buying in cash, you might be able to get a discount off the price, making the car cheaper, but bigger discounts are typically available if you opt for a finance deal that charges interest. If you are able to keep the contract length short, then this can work out to be the cheapest option overall.

Types of 0% APR finance

Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements are the most popular types of car finance in Britain and you’ll find 0% APR offers for both.

PCP offers lower monthly payments and greater flexibility because the monthly payments only cover part of the car’s cost – the value that it’s expected to lose during the length of the contract agreement.

At the end, you’re able to return the car with nothing more to pay. Alternatively, you can pay the remainder of its cost - the optional final payment - and you’ll own the vehicle. This final payment amount can also be refinanced.

Should the car be worth more than the final payment, then trading it in or selling it will result in some money being left over once the finance has been settled. This can be returned to you or used as a deposit towards another car.

A Hire Purchase agreement involves higher monthly instalments than for a PCP on an otherwise like-for-like deal because the car becomes yours, with nothing more due, once the final payment is made.

Requirements for 0% APR finance

Many 0% APR deals require a large deposit. This is to give the lender a greater chance of getting their money back if the customer misses payments close to the start of the agreement.

Lenders increase interest rates for customers with poor credit ratings, as they are seen to be at higher risk of missing their payments.

This means that the lowest 0% APR rates are often only available to drivers with a good credit score.

What is APR?

Annual Percentage Rate - known as APR - might sound like just one more thing in a catalogue of confusing car finance jargon, but it’s an absolutely crucial element to understand if you’re looking to take out a good value car finance deal. This is because it reflects what you get when you add up the interest rate at which the money for the car is being lent and any extra charges for the borrowing, which could include things like fees for taking out finance.

What you really need to remember, though, is one key point: the higher the APR, the more expensive your borrowing is going to be, as more is going to be added in interest costs and other charges. Keep reading to get your head around the ins and outs of APR and how it impacts the cost of car finance.

What APR calculations don’t account for are any extra optional charges such as payment protection insurance. The APR figure also doesn't take into account any charges that you might incur during a finance contract due to your own actions - such as fees for missed payments. As a result, it's important to ensure you are aware of the cost of any possible extras or other charges before you sign a car finance contract.

Having said that, the APR figure is still by far the most useful way to compare the cost of finance deals with one another - and lenders must publish these for finance deals such as Hire Purchase (HP) or Personal Contract Purchase (PCP) agreements. For example, the cost of interest and other compulsory charges on a 6.9% APR used car finance deal will be around half that of an equivalent 13.9% APR contract (assuming the same finance type, cash price, deposit and contract length).

There are two types of APR, and it's helpful to understand the difference. These are representative and personal. Representative APR is the rate you will see advertised, and lenders are only obliged to offer this to 51% of customers - you may fall into that 51% or you may not.

Personal APR is what you actually end up paying, and takes into account your own circumstances and your personal credit score. This could be the same as the advertised rate, though it may be higher.

How do you get low APR on car finance?

Getting a low APR car finance deal depends on several factors. Firstly you need to shop around to find a car that is available with a low APR deal. Secondly, you are likely to need a strong credit score to be able to take advantage of the best deals with the lowest APR figures.

Typically, the lowest APR car finance is available on new cars. This is because car manufacturers often subsidise the finance, with low APR finance effectively being offered instead of a discount on the cash price of a new car. However, remember that new cars have the highest cash prices, so while you may not pay that much in interest, the car itself is likely to be more expensive than an equivalent nearly new or used car.

As a result, you may be able to get a 0% APR finance deal - also known as interest-free credit - on a new car, though this will usually rely on you having a particularly strong credit score. Rates of 2.9%, 4.9% and 5.9% APR are more common. However, because you’re most likely borrowing more money overall than you would for an equivalent used or nearly new car, a low-APR deal for a new car can still cost you a lot overall.

So, although used car finance typically comes with higher APR charges than new car finance, the overall amount you pay may still be lower because the cash prices upon which any interest is charged are so much lower. As an example, BuyaCar typically offers finance from 6.9% to 9.9% APR on a broad range of nearly new and used cars, though even some car manufacturers charge as much as 14.9% APR or more on some used cars and those with lower credit scores may have to pay 25% or even 50% APR with some lenders.

Why is APR important?

No one wants to pay more in interest than they have to. Therefore, finding the lowest APR finance on the car you want should cut your bills. When thinking about APR it's important to bear in mind the cash price, too. That's because a low APR finance deal on a car with a high cash price can still prove very expensive - you're just paying more for the car itself and less of a premium for the finance.

Since how much interest you pay is not only affected by the APR figure, but also the amount you borrow and how long you borrow for, choosing a used car with a higher APR but a lower cash price could still save you money.

As an example, you'd end up paying the same in interest whether you chose a £20,000 new car with 5% APR finance or a £10,000 used car at 10% APR. The higher cash price, meanwhile, means that the new car ends up costing far more per month, as you've borrowed more money and have more to pay back, even if only a small proportion of this cost is made up of interest charges.

This means that to reduce the overall amount you pay in interest and reduce your monthly payments, you need to focus on cars with both a reasonably low cash price and a low APR figure.

New car finance: £20,000 car at 5% APR (36-month Hire Purchase contract)

Deposit: £0

Monthly payment: £598

Total amount payable: £21,543

Interest charged: £1,543

Used car finance: £10,000 car at 10% APR (36-month Hire Purchase contract)

Deposit: £0

Monthly payment: £321

Total amount payable: £11,543

Interest charged: £1,543

APRs for borrowers with a strong credit rating generally start at 6.9% on used cars. This is BuyaCar’s lowest rate. For the average borrower, BuyaCar’s APR is around 9.9%, although other lenders may charge notably more than this. At the time of writing Zuto, for instance, offers 10.9% APR for those with an excellent credit score, while some car manufacturers charge as much as 15.9% APR on used cars. People with a poor credit rating, meanwhile, may be offered anything from 29.9% APR to as high as 49.9%.

The higher the APR, the quicker interest racks up. Go for a longer contract with a high APR and even more interest mounts up. This is the case when the cash price of two cars with different finance offers is the same. If the car has a higher cash price, meanwhile, interest builds up even quicker, as you've borrowed more money.

Look at the table below for an indication of how higher APR charges can quickly increase both your monthly payment and the overall amount of interest you have to pay on a £15,000 car financed on Hire Purchase over 48 months. Since the lowest APR is available on new cars, remember that to take advantage of the lowest interest charges you typically have to purchase a new car, which increases your monthly payments.

Therefore, when comparing finance deals on new and used cars - or cars with different cash prices - it's worth getting like-for-like finance quotes (using the same type of finance with the same deposit, contract length and mileage allowance) to see not only which one costs the least in interest charges, but how the monthly payments compare.