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0% financing on car--is there a catch?
Posted on 1/6/14 at 6:38 am
Posted on 1/6/14 at 6:38 am
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.
Posted on 1/6/14 at 6:41 am to CorkSoaker
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.
Posted on 1/6/14 at 6:44 am to CorkSoaker
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.
Posted on 1/6/14 at 6:44 am to CorkSoaker
You usually don't get all the rebates if you go the 0% route.
Posted on 1/6/14 at 6:45 am to CorkSoaker
Sometimes there is a choice between 0% or a couple of thousand cash back.
Posted on 1/6/14 at 6:47 am to CorkSoaker
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.
In this case, they may not reduce the price as much in order to make money off the sale and not the finance.
Posted on 1/6/14 at 6:49 am to Enadious
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.
Posted on 1/6/14 at 6:50 am to 4LSU2
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?
Posted on 1/6/14 at 6:51 am to SmellslikeKevinBacon
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%
Posted on 1/6/14 at 6:53 am to CorkSoaker
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.
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.
Posted on 1/6/14 at 6:53 am to Enadious
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.
If your company doesn't offer the "X Plan" you don't know what your missing.
Posted on 1/6/14 at 6:53 am to CorkSoaker
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.
Posted on 1/6/14 at 8:01 am to CorkSoaker
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
Dealer will probably offer you something higher than you can find on your own
Posted on 1/6/14 at 8:52 am to Croacka
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.
Posted on 1/6/14 at 8:56 am to MamouTiger65
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
Posted on 1/6/14 at 9:01 am to Geaux17
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
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
Posted on 1/6/14 at 9:13 am to Croacka
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 1/6/14 at 9:14 am
Posted on 1/6/14 at 10:20 am to Geaux17
quote:
Can you tell me more about the "x plan".
marketing ploy
Posted on 1/6/14 at 10:25 am to 4LSU2
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.
Posted on 1/6/14 at 10:30 am to GetMoney11
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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