Year-end auto loan deals: Free financing from Ford, Lincoln

Percentage sign on car

Ford and Lincoln are rolling out some good year-end deals, hoping to clear the remaining 2012 model-year vehicles from dealership lots.

The discounts come in the form of cash-back offers and 0% financing for up to five years.

Here are some of the 2012 models that come with free financing through the end of the year:

Ford: Fusion, Fusion Hybrid, Flex crossover and Expedition SUV.

Lincoln: MKZ, MKX crossover and Navigator SUV.

In most cases, 0% financing is the best discount you can get on a new vehicle.

These interest-free auto loans are offered through Ford Motor Credit or Lincoln Automotive Financial Services, depending on the car model. Buyers need to take delivery from dealer stock by Jan. 2, 2013.

How much can 0% interest save you?

A couple thousand dollars.

Here's an example: Sticker prices for the 2012 Ford Fusion start at $21,500, including delivery, processing and handling fee. Make a 10% down payment, and the balance is $19,350.

Borrow that amount with a 60-month, interest-free loan, and the monthly payment is $323.

But what if you had to finance the vehicle with a traditional 5-year auto loan, which costs 4.25% on average, according to our latest national survey? In this case, your monthly payment would be $359.

The automakers' deal saves you almost $36 every month, or an extra $2,160 in your pocket over the life of the loan.

Average new-car loan rates

Term Interest rate
36 months 4.10%
48 months 4.15%
60 months 4.24%

The manufacturers also are offering bonus cash rebates on top of the cheap loans.

For example, the Fusion has an extra $1,750 bonus cash incentive, while the Lincoln MKS has a $3,000 incentive.

Ford and Lincoln offer even larger cash bonuses for buyers who choose to finance at regular rates. But the savings from an interest-free loan and smaller cash bonus would probably be the better deal.

Use our auto loan calculator to help figure out the best option for your budget.

The big question is whether you can qualify for 0% financing.

Discount loans are always reserved for customers with at least average, if not good to excellent, credit.

There are no set rules for who qualifies for the best rates, but if your credit score is less than 670, don’t be surprised if you’re turned down.

These loans are available across the country, but details may vary depending on where you live. Check with your local dealer to get specific rules.

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