0% APR Car Loans, Really?

The first important question to answer is: what is APR? Any kind of loan will include an interest rate. However, the interest rate does not include additional, hidden fees, insurance requirements, or other expenses. The combination of all of these is what makes up the APR, or annual percentage rate. In the Truth in Lending Act, the government not only simplified and made visible the other payments, it created a tool which allows consumers to compare prices and financing options more accurately and easily. “0% APR” says on the surface that the car loan you’re looking for doesn’t have any of these extra fees attached to it. Unfortunately, using low or 0% APR as an advertising strategy is very common, and if you don’t look at the fine print, you are likely to end up paying more than you bargained for.

Often 0% APR is only available to those with the highest credit scores. When this is not the case, a number of little details can make 0% APR more expensive than it suggests. According to the FDIC, for some types of loans, the APR can change if the amount of money in your deposit account drops below a certain amount or if you lose your job, so it is important to make sure the loan is exactly how you want it.

As with any statistic, it is possible to misrepresent the data. Frequently, it is better for you to calculate the APR on your own, based on your own situation and needs. You can obtain free software via the US Treasury that will calculate it for you, or you can do it yourself. The “Truth in Lending” government-produced booklet is lengthy, but features specific advice on calculating APR by yourself.

As with all financial decisions, check the fine print. Even a deal advertised with “0% APR” can fool you. Tailor your loans to meet your needs, and always consult a financial advisor if you have questions.

Jessica Malitoris

Jessica Malitoris was born on August 30, 1990 in London, England to Kerry and John Malitoris. Sixth months later, she and her parents moved to Concord, Massachusetts, a town just outside of Boston. Her younger sister, Julia, was born in 1993. In 1998, the family moved to Vienna, Virginia, near Washington, DC, and in 2004 the family moved again, this time to Raleigh, North Carolina.

Jessica attended high school at Ravenscroft School in Raleigh. She participated in swimming, cross country, and track and field. In track, she was Conference champion her junior and senior years in the 100 meter hurdles. In school, her favorite topics were History and English, and in the summer after her junior year, she studied abroad at Cambridge University in England, majoring in European History and English Literature. That summer, she also attended the Tar Heel Girls’ State educational program, and completed the course that enabled her to become a lifeguard.

Throughout high school, Jessica had worked as a swim instructor for the A. E. Finley YMCA in Raleigh, but during her senior year she began to also work as a lifeguard. At the beginning of the year, her article on the development of the Gothic architectural style in France was published in the Concord Review, a national history periodical. In the spring, she made her decision to attend the University of North Carolina at Chapel Hill the following year. Later in the spring, she worked as a research assistant to Professor Michael McElreath of Meredith College. She researched and offered recommendations on potential reading assignments and textbooks for a future course on American Intellectual History.

The summer before beginning college, Jessica worked again as a swim instructor and lifeguard for the YMCA. She began school at UNC Chapel Hill in the fall of 2008. In the spring of 2009, she began work on an article about the changing social and economic roles of women in Mali, a sub-Saharan African nation.The following summer, she completed work on her article while again lifeguarding for the YMCA.

She is now nineteen and a sophomore at UNC Chapel Hill, hoping to major in History with a concentration in non-Western civilizations and a possible minor in Women’s Studies. She enjoys reading, writing, playing the piano, researching, and drawing, and hopes one day to become a professor.

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