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Old 09-27-2018, 10:32 AM
 
Location: NJ
22,674 posts, read 28,568,174 times
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i read an article not too long ago that said that automakers were moving away from 0% financing, so it may not be around for too long. it all depends on what they perceive they need to do to move vehicles quickly (or vehicles are moving quickly enough that they dont need to offer that incentive).

i love 0% financing. but you do want to make sure that you are getting the same price (or better) than someone who isnt financing. i dont really talk about financing when i sit down to buy a car. i just negotiate the price i want to pay for the car (i never mention the monthly payment because that is meaningless).

oh and when i buy a car, im very flexible. i have certain basic needs and will buy any of a number of brands and models that fit the need. i also am perfectly fine with the previous model year and i prefer little to no options. the more flexible you are, the better shot you have of getting the right financing and deal you want. i tend to not get as good of a deal on my wife's cars because she isnt as flexible as me.
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Old 09-27-2018, 10:53 AM
 
Location: Aurora Denveralis
2,999 posts, read 1,017,500 times
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Quote:
Originally Posted by CaptainNJ View Post
i read an article not too long ago that said that automakers were moving away from 0% financing, so it may not be around for too long. it all depends on what they perceive they need to do to move vehicles quickly (or vehicles are moving quickly enough that they dont need to offer that incentive).
It's a marketing tactic, nothing more and nothing less, and such things go in cycles (if not circles). When zero-percent financing is offered out of the blue after a hiatus of a few years, people flock in. Not so much after it's been available for a while, so it goes back on the shelf in favor of... rebates. Or a completely redesigned model. Or a new model. Or some other tactic crafted by the marketing division. And then one day, OMFG, ZERO PERCENT FINANCING! THEY'RE GIVING AWAY CARS, MABEL!
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Old 09-27-2018, 11:05 AM
 
1,008 posts, read 526,936 times
Reputation: 2682
Quote:
Originally Posted by Quietude View Post
It's a marketing tactic, nothing more and nothing less, and such things go in cycles (if not circles). When zero-percent financing is offered out of the blue after a hiatus of a few years, people flock in. Not so much after it's been available for a while, so it goes back on the shelf in favor of... rebates. Or a completely redesigned model. Or a new model. Or some other tactic crafted by the marketing division. And then one day, OMFG, ZERO PERCENT FINANCING! THEY'RE GIVING AWAY CARS, MABEL!
I work in sales forecasting for one of the large automakers and I assure you that while yes, it is very marketable, it is far from just a marketing tactic. Any incentive from the manufacturer level does cost us money and eats into profitability. Every month there is a balancing act between budgeting incentive $ and sales volume.
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Old 09-27-2018, 05:15 PM
 
Location: Ohio
18,012 posts, read 13,243,316 times
Reputation: 13787
Quote:
Originally Posted by krug View Post
I'm in the market for a new F150, and the 0% financing for 72 months expires end of September. Do you think these rates will continue, or will these free money be a thing of the past.
Um, there's no such thing as "0%" financing.

Used to be that when filing articles of incorporation, the States required a business to specifically define what it intended to do.

So Ford Motor Company's articles of incorporation would state "to manufacture, produce and distribute motor vehicles."

Now, States have changed their laws and allowed corporations to amend or refile their articles of incorporation to include this verbiage:

To engage in any lawful act or activity for which a corporation may be formed, and all lawful acts and activities of the corporation are within the purposes of the corporation.

Ford Motor Company can sell cosmetics if it wants, or open a chain of grocery or clothing stores, or run a broadcast television network.

With "0%" financing, you actually pay more for a Ford or Honda or Toyota than you would if you went to a bank or credit union to get a loan, because they jack up the price of the vehicle.

If automakers weren't allowed to operate their own finance companies, the sticker prices would be several $1,000 less than what you're paying now.

The price of the vehicle now includes the costs, plus a hefty profit, plus the equivalent of about 10%-12% in interest.

You really aren't paying "0%" financing, it's just a gimmick to get you on the lot and pay for an over-priced vehicle.
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Old 09-27-2018, 10:46 PM
 
4,319 posts, read 5,271,288 times
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Amazingly lots of things are 0% financing and it makes no sense not to accept their free money. I bought an engagement ring and fully expected to pay in cash, no big deal to me, but they offered no discount whatsoever for paying in cash, yet had 18 months of 0% financing so I just figured, well whatever, if you don't want your money upfront, I'll gladly pay it over the next 18 months then lol.

When I had our HVAC system installed, it was $28,000 and I was still waiting on my previous home to sell, so I was short on cash for about 60 days. They had 0% financing too for a year, so I just took the deal and paid it all off in full 2 months later. It wasn't an installment plan like the engagement ring, where it amortized over the 18 months, instead it was just some small minimum per month and lump sum due by the 12 months end, or the rate would go up, that kinda thing.
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Old 09-28-2018, 05:22 AM
 
11,316 posts, read 5,846,190 times
Reputation: 20989
Quote:
Originally Posted by Mircea View Post
Um, there's no such thing as "0%" financing.

Used to be that when filing articles of incorporation, the States required a business to specifically define what it intended to do.

So Ford Motor Company's articles of incorporation would state "to manufacture, produce and distribute motor vehicles."

Now, States have changed their laws and allowed corporations to amend or refile their articles of incorporation to include this verbiage:

To engage in any lawful act or activity for which a corporation may be formed, and all lawful acts and activities of the corporation are within the purposes of the corporation.

Ford Motor Company can sell cosmetics if it wants, or open a chain of grocery or clothing stores, or run a broadcast television network.

With "0%" financing, you actually pay more for a Ford or Honda or Toyota than you would if you went to a bank or credit union to get a loan, because they jack up the price of the vehicle.

If automakers weren't allowed to operate their own finance companies, the sticker prices would be several $1,000 less than what you're paying now.

The price of the vehicle now includes the costs, plus a hefty profit, plus the equivalent of about 10%-12% in interest.

You really aren't paying "0%" financing, it's just a gimmick to get you on the lot and pay for an over-priced vehicle.
Thatís not how it works. Unless the manufacturer is offering a deal with $X rebate OR 0% financing, the dealership is paying the same for the car either way. Thereís no cash discount.
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Old 09-28-2018, 09:07 AM
 
Location: Paranoid State
12,685 posts, read 9,432,561 times
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In general, 0% or near-0% financing is a sales incentive used to move inventory at the end of its product year. I haven't looked at the details, but I'll bet that 0% is only on end-of-model-year 2018 F150s and not the new-for-2019 F150s.

One year from now, Ford is likely to offer zero or near-zero percent financing on 2019 F150s to clear the lots for 2020s.
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Old 09-28-2018, 10:07 AM
 
Location: Vienna, VA
203 posts, read 104,976 times
Reputation: 221
Quote:
Originally Posted by JonathanLB View Post
Amazingly lots of things are 0% financing and it makes no sense not to accept their free money. I bought an engagement ring and fully expected to pay in cash, no big deal to me, but they offered no discount whatsoever for paying in cash, yet had 18 months of 0% financing so I just figured, well whatever, if you don't want your money upfront, I'll gladly pay it over the next 18 months then lol.

When I had our HVAC system installed, it was $28,000 and I was still waiting on my previous home to sell, so I was short on cash for about 60 days. They had 0% financing too for a year, so I just took the deal and paid it all off in full 2 months later. It wasn't an installment plan like the engagement ring, where it amortized over the 18 months, instead it was just some small minimum per month and lump sum due by the 12 months end, or the rate would go up, that kinda thing.



They may not discount cash, but you're more than likely you could have gotten a better deal had you gone somewhere else. I know the HVAC biz pretty well, and all the companies I see offering 0% financing are usually really expensive to start with. The smaller contractors want to be paid cash, but they can be up to 50% cheaper than the large companies. For $28,000 that must have been quite the job! An average size home running a single zone system is usually around $5k - $7k to replace.
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Old 09-28-2018, 10:57 AM
 
Location: Aurora Denveralis
2,999 posts, read 1,017,500 times
Reputation: 3814
Quote:
Originally Posted by Mircea View Post
Um, there's no such thing as "0%" financing.
Oh, nonsense. There most certainly are loans in which the interest rate is zero percent, which is what the term means. If you're going to stretch way over and claim it means "no buying costs," you'd be correct, but arguing that this element of dealer sales tactics doesn't exist is just self-cancelling nonsense.

No one's arguing that it's not usually (often) (always) part of a bigger package of costs and subsidies to the dealer meaning the buyer is probably getting screwed. That's a given. But just waving your hands and saying it doesn't exist is useless babble.
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Old 09-28-2018, 11:04 AM
 
Location: Aurora Denveralis
2,999 posts, read 1,017,500 times
Reputation: 3814
Quote:
Originally Posted by clawsondude View Post
I work in sales forecasting for one of the large automakers and I assure you that while yes, it is very marketable, it is far from just a marketing tactic. Any incentive from the manufacturer level does cost us money and eats into profitability. Every month there is a balancing act between budgeting incentive $ and sales volume.
Wow, you don't say. That's some government-level spin, there, pal.

Of course there are costs to every sale for the dealer and manufacturer; car sales are not an area where you simply collect a check for MSRP and the buyer drives away. Incentives, discounts, flat-out kickbacks under more polite names, co-marketing arrangements with tire and option makers... it's a jungle out there. Makes me want to break out the sad violins for ya.

...but wait, wait... it's that way because the automakers have spent 75 years making it that way: making the buying process as murky and impenetrable and flat-out secret as much as possible, dangling shiny toys with one hand while picking pockets with the other. Instead of just pricing to sell and keeping it simple, it's a nonstop shell game of cheap financing against loaded option requirements, rebates against artificially high prices, discounts against manufacturer incentives and other paybacks.

And every single one of those elements brought to bear on a buyer trying to make a sensible, understandable purchase is nothing more and nothing less than a marketing tactic, except when it's a sales tactic. Dressing up all the bullying as finance issues and boo-hoo costs for the dealer to make the sale is... almost amusing.

But I guess you have to sleep at night like the rest of us.
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