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It's one of the best-kept secrets of the car business: 0% car financing, one of the largest discounts a consumer could hope for in an entire lifetime of conspicuous consumption, remains stubbornly beyond the reach of most car buyers.

The number of 0% deals has soared this year as domestic, Asian and European car makers strive mightily to breathe life into their U.S. car sales. It is not unusual for a manufacturer to put 0% deals on more than two-thirds of its vehicles. Many of them are the equivalent of a $2,000 or $3,000 rebate.

And the very idea of 0% -- with its subtext of getting something for nothing -- lends itself to a simple yet powerful marketing message that car dealerships can promote in every medium, from cable TV to newspapers to Facebook. But, paradoxically, these deals can also squeeze out competing loans and pave the way for higher costs if a buyer isn't careful, experts say.

Hard To Get

Moreover, they aren't available to everyone. The programs exclude about 60% of the car buying public. The reason: Buyers with less than sterling credit generally do not qualify for them.

"The people who are going to take advantage of the 0% are the ones who don't need it," said Mark Dubis, a Cleveland-based dealership consultant and president of The Dubis Group. "And the ones who do need it can't qualify it."

Automakers are notoriously tight-lipped about what credit scores are needed to qualify for their best financing rates. But Michael Royce, AOL Autos contributor, former car salesman and publisher of, estimates customers may need at least a score of 680 to 700.

Many buyers are already sitting across the desk from dealership salesperson when they find out they don't qualify. That's especially likely if they have a mediocre-to-low score and haven't bothered to check it ahead of time.

Other issues complicate the deals. For one thing, buyers tend to fall in love with cars -- not interest rates. So, once they see a dealer's inventory, the particular model they may not feature the 0% deal that attracted them to the showroom in the first place.

And if they opt for a 2011 model instead of 2010, the loan for the new 2011 often won't carry the same four- or five-year term -- if the car even features 0% financing at all. And these days, a few 2010 models feature 0% deals that are for 36 months or less. During August, for example, offers for the 2010 Kia Soul, a Mazda CX-7, or a 2010 Ford Taurus were limited to three years. Relatively few buyers want terms that short.

According to a recent Kelley Blue Book survey, 62 percent of car shoppers in the market for car loans right now are looking at financing over 48 or 60 months compared to 21 percent for 36 months.

Still, consumer finance experts like 36-month terms: they keep the total cost of a loan down.

Whatever the difficulty, buyers may be well into the buying process when they find out that 0% won't work for them. So they may take the path of least resistance and accept an alternate financing option from the dealership without much quibbling.

That could take away one of the buyer's key levers in the negotiating process: the ability to play one financing offer against another.

Hard To Walk Away

A range of psychological factors come into play at that point, Royce says. Many people have a hard time exiting a sales discussion smoothly if their original plans fall apart. So they go with the flow.

"That's whole thing about the buying process," he said. "The dealership gets you with the test drive, and if they can get you to the desk after the test drive and you are excited, you are in the process and it's very hard to walk away."

Furthermore, at that point, both the salesperson and the buyer may be inclined to shift the focus of the sales discussion to the size of the payment -- rather than the interest rate. Ultimately, that could lead them to a term as long as 72 months.

"What they should do is go for the rebate, and then go for the shortest possible term," Dubis said. "Instead, they are going for the longest term and the lowest monthly payment."

With a six-year loan, the payment will likely end up lower than it would on a shorter-term 0% deal -- but there is a downside: Without a hefty down payment, the buyer will be "upside-down," owing more than the vehicle is worth, for the entire term of the contract.

It's a nightmare scenario mirroring the housing crisis that brought the world financial system to its knees in 2008.

The continuing debt load will never seem to go away, complicating the process of buying a new car down the road. Gary Pierce of Lending Tree Autos, an online clearinghouse for car loans, said consumers' tendency to go along with the process shows up in his statistics, too. One out of 10 pre-approved Lending Tree deals doesn't survive the negotiating process in the dealership; the buyer accepts a dealership offer instead.

That's a testament to the persuasive power of the salesperson and the environment. It's also a sign that dealerships can be good sources of financing. They have long-standing relationships from a variety of lenders and can be especially helpful if a buyer has credit problems. But it may take a competing offer from a non-dealership source to lead a dealer to come up with the best possible counter-offer. "Hopefully, customers are getting a good deal in those cases, as much as we would like to be the one providing them with the loan," Pierce said.

Consumers don't normally reach that point unless they have a pre-approved offer from a bank or credit union in hand as a bargaining chip, however.

Since automakers usually offer a choice of a rebate or 0% financing, it may be best for consumers to take the rebate and use the financing they arranged themselves for the purchase. In this way, they shave thousands off the price of the vehicle and get a relatively low interest rate to boot.

"Most of the time when people crunch the numbers, you are better off getting your financing at the credit union," said David Adams, CEO of the Michigan Credit Union League. He said he has seen many credit union rates for new car loans at 4 or 5%.

So is it "game over" if buyers fail to get financing in advance? Not necessarily, Adams said. They can still turn the situation to their advantage.

While dealerships tend to steer consumers to an affiliated lender to make a higher commission on the loans, "virtually all dealerships have relationships with credit unions," he said. "So you need to be smart enough to say, 'What about a credit union option?'"

Consumers won't fare well if they blindly put their trust in advertised low-rate deals. While 0% offers can definitely save well-qualified buyers money, they basically exist for a different reason: Automakers need these deal sweeteners to sell enough cars to keep their factories humming.

Nearly every automaker, from Suzuki to General Motors, is offering them these days. Their dealers don't have it particularly easy. Amid the cutthroat competition, their profit from the actual sale of a new vehicle is razor-thin -- if it exists at all. And they make less money on the 0% financing deals than they would on their financing, Royce said.

While dealers do need to make money, consumers need to be on their toes so they aren't making an excessively generous contribution to their dealer's revenue goals.

Otherwise, they could end up paying a few thousand dollars more for their car than the next guy driving off the lot.

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