0% financing on car--is there a catch? | TigerDroppings.com

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CorkSoaker
LSU Fan
Biloxi, MS
Member since Oct 2008
3806 posts
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0% financing on car--is there a catch?



Thinking about buying a car today (following Will Cover's advice, of course) LINK but wasn't sure if the 0% financing is also a scam or if there is a catch I am not seeing. Toyota is offering it and today is the last day.






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SmellslikeKevinBacon
LSU Fan
Louisiana
Member since Dec 2012
2289 posts

re: 0% financing on car--is there a catch?


I don't think so. Your credit has to be excellent to get the 0% and normally there are certain terms on the length on the loan when you do 0%. I think it may depend on the lender. when we bought my wife's car from Honda it was 0% for 48 months or 1.9% for 60.





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4LSU2
LSU Fan
Madisonville
Member since Dec 2009
22661 posts

re: 0% financing on car--is there a catch?


0% is always free money, but there is a catch. The catch is that they don't come off the sticker price much at all for the 0% incentive. Financing options often vary as they inch up percentage points while the sell price decreases.





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GeauxWrek
USA Fan
Somewhere b/w Houston and BR
Member since Sep 2010
2719 posts

re: 0% financing on car--is there a catch?


You usually don't get all the rebates if you go the 0% route.





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Shaun176
LSU Fan
Baton Rouge
Member since Aug 2008
705 posts

re: 0% financing on car--is there a catch?


Sometimes there is a choice between 0% or a couple of thousand cash back.





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Enadious
LSU Fan
formerly B5Lurker City of Central
Member since Aug 2004
14538 posts

re: 0% financing on car--is there a catch?


Sometimes a dealer will cut more off sticker if they're making a bundle on the interest.

In this case, they may not reduce the price as much in order to make money off the sale and not the finance.






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Enadious
LSU Fan
formerly B5Lurker City of Central
Member since Aug 2004
14538 posts

re: 0% financing on car--is there a catch?


Make sure if you miss one payment the fine print doesn't say the interest rate goes up to 20% or some other nonsense. I haven't financed a car since 1984 so I'd have to read each line of the contract before I would trust anything from a car dealership.






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CorkSoaker
LSU Fan
Biloxi, MS
Member since Oct 2008
3806 posts
 Online 

re: 0% financing on car--is there a catch?


quote:

0% is always free money, but there is a catch. The catch is that they don't come off the sticker price much at all for the 0% incentive. Financing options often vary as they inch up percentage points while the sell price decreases.


what if I don't disclose the fact that I am wanting to do the 0% financing until after the deal is set with the price of the car?






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CorkSoaker
LSU Fan
Biloxi, MS
Member since Oct 2008
3806 posts
 Online 

re: 0% financing on car--is there a catch?


quote:

when we bought my wife's car from Honda it was 0% for 48 months or 1.9% for 60.


what type of honda? I didn't think honda ever offered 0%






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Rebel
Memphis Fan
Graceland
Member since Jan 2005
83511 posts

re: 0% financing on car--is there a catch?


No catch other than you are borrowing more up front. The first few years you will be "upside down". But you won't have spent several grand up front.

You will still have some fees due at signing that can't be rolled into the financing. But if you plan on keeping the car 7-8 years - borrowing money for free is usually a good thing.






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GetMoney11
LSU Fan
Cenla
Member since May 2009
1438 posts

re: 0% financing on car--is there a catch?


My wife and I bought our first new vehicle after she graduated last year and the only credit we had were two credit cards. Paid $500 above the invoice and got 0% for 60. Plus a big rebate.

If your company doesn't offer the "X Plan" you don't know what your missing.






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4LSU2
LSU Fan
Madisonville
Member since Dec 2009
22661 posts

re: 0% financing on car--is there a catch?


quote:

what if I don't disclose the fact that I am wanting to do the 0% financing until after the deal is set with the price of the car?


They will let you know right off the bat that the 0% comes with nothing else. This is how they win. The profit from the sale is in the sticker price you're purchasing without financing fees so that they can move the car.







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Croacka
UNLV Fan
Denham Springs
Member since Dec 2008
51136 posts
 Online 

re: 0% financing on car--is there a catch?


More often it's best to take the rebates instead and find your own financing

Dealer will probably offer you something higher than you can find on your own






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MamouTiger65
LSU Fan
Baton Rouge, La
Member since Oct 2007
288 posts

re: 0% financing on car--is there a catch?


Bought a Toyota for my wife a few months ago. I got a quote online and was told that I could either get rebates or 0% for 60 months. The base price was the same either way. The online quote was also much lower than any price we were able to get in person.





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Geaux17
LSU Fan
Member since Jan 2006
1522 posts
 Online 

re: 0% financing on car--is there a catch?


Can you tell me more about the "x plan". My company offers it but I really haven't researched it. I'm going to be buying a car in 2-3 months. Thanks





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Croacka
UNLV Fan
Denham Springs
Member since Dec 2008
51136 posts
 Online 

re: 0% financing on car--is there a catch?


It's for ford and Lincoln I believe


It's basically an agreed upon price that's slightly above invoice

It's a good price that involves no negotiations but the price can easily be beaten by a decent negotiator






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SG_Geaux
LSU Fan
Googolplexian Posts
Member since Aug 2004
50246 posts
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re: 0% financing on car--is there a catch?


quote:

It's for ford and Lincoln I believe


It's basically an agreed upon price that's slightly above invoice

It's a good price that involves no negotiations but the price can easily be beaten by a decent negotiator



This is correct.

It is great if you don't feel like haggling.

When Ford still owned a piece of Mazda, I bought two Mazdas with this.

In both cases, I got dealer invoice - factory to dealer incentives AND 0% interest.

Hell my last Mazda, I called the dealer and told them what car I wanted, showed up and was gone in 30 minutes.



This post was edited on 1/6 at 9:14 am


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yellowfin
Illinois Fan
Coastal Bar
Member since May 2006
70574 posts

re: 0% financing on car--is there a catch?


quote:

Can you tell me more about the "x plan".


marketing ploy






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Volvagia
LSU Fan
Baton Rouge
Member since Mar 2006
40797 posts
 Online 

re: 0% financing on car--is there a catch?


quote:

0% is always free money, but there is a catch. The catch is that they don't come off the sticker price much at all for the 0% incentive. Financing options often vary as they inch up percentage points while the sell price decreases.


That's why when you agree on a price, you slap down a pre approved auto loan check from your bank.






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Enadious
LSU Fan
formerly B5Lurker City of Central
Member since Aug 2004
14538 posts

re: 0% financing on car--is there a catch?


My company has X plan and I paid thousands below invoice on a 2012 Tundra and 2014 Lexus IS 350. Using the X plan would have cost me money.





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