re: Is it smart to buy a car at 0% and no money down. Is there something I'm missing here?

$150 if it sits in savings. It will also give me peace of mind of reserves. The $30 is worth that fee.

I have done this several times. As others have mentioned, you will be upside down once you drive the car of off the lot. However, that should not be too much of a problem since you have the money that you would put down.

When I purchased my first car following 9/11, I was going to put $20k down. But they started offering 0% interest for 36 months. I decided to put nothing down and invest the $20k. But instead I left it in savings. About a year later, I wondered where most of the $20k went. The moral of the story is pay the down payment if you don’t have the discipline to save or invest the money.

Financing makes you stretch your budget more than buying for cash, or with a significant down payment. If you had 40k cash, would you part with it for the same car, or buy something more modest?

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f you were going to out $10k down today anyway, why not keep it and skip the gap insurance? Being upside down is irrelevant when you have the money in the bank to make up the difference.

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exactly. somebody must of accidental down voted this

So just an update, we got he 0% for 60 months. $635 a month with no money down.

Our frickin sales tax here is terrible. We paid 9.1%. 4.22% for state, 3.38 for County and 1.5 for City.

I turned down all those additional packages from the finance guy. He did not like that one bit. At one point I go, you want me to pay an extra $3800 (60/mo) to etch a VIN number and an additional warranty? They try to get people with the "It's only a little bit extra a month".

After I argued he cut it down to $37/mo. I still rejected. Just scams, man. That's not even the worse one. There was one they were selling for an extra $100 a month.

My wife said she would have bought them if I hadn't been there

Anyway, love the new car. Thanks guys.

GAP insurance is so cheap that it is a rounding error in the purchase of a new vehicle.

Yes, it is unlikely you need to make the claim but I’ll gladly pay for the peace of mind. The downside risk sucks if you wreck in the first year.

Ok, let’s play this out.

Assume the GAP covers $10,000 difference between loan and value.

Car is wrecked and totaled coming out of the dealership lot.

With GAP: Pays the $300 GAP coverage and may have a deductible of say $500. So, $800 total. Pays that and has $9,200 cash remaining.

Without GAP: Pays $10,000 difference to settle loan.

There is a big cash flow difference.

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Ok, let’s play this out.

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Insurance usually does look like a good deal if you assume you need to use it within a year.

The rest of the time you're just doing this:

I’m surprised at some of the hardline stances on this topic. Having been on the board for years, auto purchases seem to bring out the most extreme differences in posters.

Yes, I acknowledge that the owner is unlikely to need to use the GAP insurance; hence, the relative affordability of the insurance. However, the downside protection is also clear to the owner.

One other consideration is the value of the “GAP” I’m getting protected against and the cost of the insurance relative to my TCO. If I make $700/month payments and have a $20,000 GAP then the $300 GAP insurance is relatively affordable. On the other hand, if I have a $5,000 GAP with $250/month payments then the relative value decreases. From what I recall, GAP insurance is fairly static in cost but I haven’t looked into it closely.