Archive for the ‘Zero Down Scam’ Category

We should all beware when a company tells us we can pay zero down and get interest free financing for 90 days. First off, we should stop right there and ask how a company would be able to make it in this tough economy if they did not charge any interest. That should be our first clue that there is something going on. This is happening everywhere and sad to say that a lot of people are falling for it and not even realizing what a horrible deal they are making.

How this zero down scam works is a company gets you in the door by offering you no down payment and interest free financing for 90 days. As soon as you (the customer) signs the contract the company sells it to a finance company at a discounted rate. They can afford to sell it at a discounted rate because they have already marked the product up enough to still make a normal profit. What ends up happening next is the part that most consumers never seen coming.

When the consumer fails to pay off the product in ninety days the finance company starts charging the consumer the maximum amount of interest on their payment each month. Plus they go back in and add the interest from the ninety days because the loan is only interest free if it is paid off within the ninety days. Then what they do is put all of the interest in the front of the payment schedule, put the conumer on a longer payment schedule than they originally were on, and charge a big fee if the loan is paid off early.

People get scammed like this by companies all the time. The biggest piece of advice one can get in this situation is to do what you have always heard. “If it sounds too good to be true, it probably is.” We as consumers need to start looking at the deals we think we are getting from the companies where we buy things. There is always something that goes along with every deal that sounds too good to pass up. Zero down sounds like a great deal but before you go out and make that deal take a look at what may happen if you fail to meet the terms of the contract.