quote:

Originally posted by RHINOWSO:

quote:

Originally posted by DMF:
The dealer, and the parent corporation, will make money. If you're getting a loan for 0%, then you can bet the profit based on the vehicle price is enough to offset the risk being assumed by letting you have their money for dozens of months.

There are no "free lunches."

Yup. They are getting you on the loan, the new car, or the trade in.

Or they'd be out of business.

True 0% from the manufacturer is a great deal, usually an either or with the rebates. You just have to weigh out the difference in cost. There are some dealers that will advertise their own 0% deals, that is when the dealer actually has to buy down the rate with the bank, crappy deal. Just check the manufacturers website to see if 0% is available from them. Only a small flat fee is made on the true 0% deals, you can't mark up 0%

You all would be surprised at how much money the dealers lose on new cars to sell them, money is made directly from manufacturer, parts, service and body shops.

They do this as a come on to get buyers excited and create a sense of urgency with an end date.
You are paying for it somewhere.

quote:

Originally posted by RHINOWSO:

quote:

Originally posted by DMF:
The dealer, and the parent corporation, will make money. If you're getting a loan for 0%, then you can bet the profit based on the vehicle price is enough to offset the risk being assumed by letting you have their money for dozens of months.

There are no "free lunches."

Yup. They are getting you on the loan, the new car, or the trade in.

Or they'd be out of business.

That's a part of the equation but not the most significant. The goal is to get as many new GM, or Ford, or Chrysler, or Toyota, or whatever vehicles into customer hands. The profit made on those sales is far second to the ongoing revenue those vehicles will insure as they find their way back to the dealer service department for maintenance, repairs, and warranty/recall work, as well as the body shop for damage repair. Additionally, the dealer pays a floor plan fee (interest) on all the vehicles they have on their lot. Those fees are not insignificant, so moving vehicles into customer's hands as quickly as possible is also a net income improvement for them.

Big Swede, GM only?

OK, I am going out on a limb here since I did not see the offer. However, I have never seen 0% financing without an corresponding offer of a discount or rebate also being offered as an alternative. (i.e. 0% financing or $3000 rebate) That discount, rebate or other cash incentive is your interest. You have to know enough about finance/math to back into the interest rate on your own.

The hard reality is that there is never a 0.00% interest rate. The interest is buried somewhere. May be hard to find but it is there.

quote:

Originally posted by ador:
With my previous auto purchases, 0% APR is not always the best route. They require a “Tier 1” credit score, 800+ (that is what I have been told at the dealership). If you qualify, they will NOT negotiate on the selling price, and will sell you at MSRP or sticker price. They will also not give you any available discount/rebates. Each manufacturer and dealership will be different.

You've been lied to.

From what I've seen, the 0% deals are usually very narrowly defined by scope. Model, year, trim, etc.

quote:

Originally posted by mark_a:
Big Swede, GM only?

Chevy Sir

quote:

Originally posted by ador:
With my previous auto purchases, 0% APR is not always the best route. They require a “Tier 1” credit score, 800+ (that is what I have been told at the dealership). If you qualify, they will NOT negotiate on the selling price, and will sell you at MSRP or sticker price. They will also not give you any available discount/rebates. Each manufacturer and dealership will be different.

My mom was able to purchase a Honda Civic years ago at 0.9% APR for 60 months, and they let us negotiate the price down.

This isn't correct at all. You don't need a 800 credit score and your financing rate doesn't keep you from negotiating the price of the car.

I've purchased over 30 new vehicles in my life and have taken advantage of 0% offers many times. There were never any restrictions like you mention. What was common was I had to select the 0% financing or another rebate but could not have them both.

I negotiate the best price on the car before we ever discuss financing or trades. Now with the internet the negotiating on the price of the car is done before I ever step foot on the dealers lot. Once I arrive at the dealers lot we discuss my trade and financing.

I'm wondering if I'll be happier with a van than with a truck.

quote:

Originally posted by BigSwede:
You can. You'd be surprised at how many trucks I sell out of state, especially to the north east. They all say I am a lot cheaper than their local dealers.

BigSwede,

what brand do you sell? E-mail is in profile if you don't want to post.

quote:

Originally posted by Angus the Kid:

quote:

Originally posted by ador:
With my previous auto purchases, 0% APR is not always the best route. They require a “Tier 1” credit score, 800+ (that is what I have been told at the dealership). If you qualify, they will NOT negotiate on the selling price, and will sell you at MSRP or sticker price. They will also not give you any available discount/rebates. Each manufacturer and dealership will be different.

You've been lied to.

Yep... Angus is correct. I got my Toyota Tundra at 0% interest AND they were meeting halfway on price AND because that wasn't good enough they threw in an extended warranty, gap insurance, and a bunch of accessories. Initially I was paying cash, but they couldn't get the few thousand dollars lower that I needed to pay cash, so they asked what if they could get me 0% interest. Of course they were under the assumption that I would then go with their price but I was not willing to pay that. That's when they sweetened the pot with the swag.

ETA: I almost forgot. At the time there was a Bass Pro Shop Promo on off road trucks, we just assumed that by getting them to lower the price AND throw in the swag that the gear promo was null and void. Until a bunch of boxes showed up on my doorstep and my wife was wondering why I ordered a bunch of stuff from Bass Pro Shop.

This is what the promo swag package contained; one (1) Ascend H2.4 dome tent, two (2) Ascend D2400 backpacks, four (4) Ascend 33" x 75" rectangular sleeping bags rated for 10°, two (2) Bass Pro Shops Extreme XPS 6'6" fishing rods, two (2) Bass Pro Shops Extreme EXS20 spinning reels and one (1) Bass Pro Shops Extreme T Qualifier 370 tackle bag.

We've used this gear quite a bit in the past three and a half or so years...

The bottom line is you have to willing to walk away and the dealer has to be able to make a reasonable amount of money.

Not always available. 1.9, .9, 0% etc. are whats's called subvention pricing. That's when the manufacturer kicks money back to the finance arm to effectively buy down the interest rate the lender charges on a particular model, trim level, etc. for a particular term. They do it to move models that might have too high a days supply or at the end of a model year to help clear inventory out ahead of th new model year. It's an incentive just like a rebate, sometimes you can combine the special pricing with any available rebates, sometimes you can't and it's either/or.

I agree, it all depends on ‘incentives’ and the rest, varies with time, models, etc..

Much of the time it may be 0% or .9% OR some amount of ‘cash back’. You can compare numbers, maybe look at the cash back with a bank loan?

quote:

Originally posted by mark123:
I'm wondering if I'll be happier with a van than with a truck.

No 0% on those but off the top of my head, $4700 minimum in rebates for business owners

@Edmond I sell Chevy only

I think I'm going to start a new thread concerning choosing between a pickup and a van.

Do watch, sometimes you get better discounts if you don't take the lowest offered interest rate.

Low rates (including 0% rates) come and go.

Also, these can spell trouble. I know a young man that was initially offered zero percent and then called back because he didn't have strong enough credit. Most auto contracts have ~3 day call back period in case there is an issue with the loan. He fell in love with the car in the 3 day period and decided to pay the much higher interest rate that was available after they completed the credit check.

If you take the low financing rate from the dealer, you are often going to have that made up with a higher price on the vehicle, or a lower offer on your trade in, or somewhere else. The dealers get a little piece of the loan deal, and it if is not as favorable for them, they will try to make that up in another part of the transaction.

I think it is easier to get a good rate from some lender, and then make your best deal on the car. Too many moving parts otherwise, and you do not know how they are interrelated.

quote:

Originally posted by SR:
Do watch, sometimes you get better discounts if you don't take the lowest offered interest rate.

Low rates (including 0% rates) come and go.

Also, these can spell trouble. I know a young man that was initially offered zero percent and then called back because he didn't have strong enough credit. Most auto contracts have ~3 day call back period in case there is an issue with the loan. He fell in love with the car in the 3 day period and decided to pay the much higher interest rate that was available after they completed the credit check.

WHAT? A "spot delivery"? Shocked I am, shocked, to use a line from Casablanca.

I have yet to get a dealer to honor it through their manufacturer financing even with excellent credit. They always want to arrange financing elsewhere to make another dollar.