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re: When should you buy a car with cash vs financing at 0%?
Posted on 11/22/16 at 9:48 am to baldona
Posted on 11/22/16 at 9:48 am to baldona
quote:
I don't know about auto financing specifically, but in general 0% financing for X amount of time generally means that you actually pay all the interest as soon as that X amount of time is up. For example if you do 0% financing for 4 years but it's a 5 year loan with 2.99% interest then the entirety of that 5 years and 2.99% interest is paid during the 5th year. It's all a marketing gimmick. Now, you can pay the car off by the 4th year and as long as there are no penalties it works out as actual 0%.
That's not how it works for cars. Both vehicles in my household are on 0% loans. On both, we negotiated the price, add in whatever taxes and fees, and divide that number by the number of months. There is no gimmick to it. I also got all incentives offered on top of the 0%.
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