Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
To be precise, you actually are getting the 0% loan from the bank. For instance, if you borrow from Chrysler Capital you are borrowing from a division of Banco Santander.
They are able to offer the 0% rate because the loans are subsidized by the manufacturers.
Example, if the "market" interest rate for someone with the prospective buyer's credit rating is 3%, the interest on a 5-year $25,000 note would be just under $2000. So the manufacturer pays the bank this money up front (actually probably less than that but I'm not going to mess with the time value calculation) to entice them to loan the buyer the money at 0%. This amount of money then comes off the table for the purpose of negotiating the selling price of the car.
So, yes, the FED rate does play a part as it determines what the manufacturer will have to pay the lender to entice them to offer the 0% financing. Obviously there's a point where it doesn't make financial sense for them to offer it.
That might be the case. I don't work with auto financing or auto manufacturers, so I'm not speaking from experience here.
We are looking to buy a car and I had originally been set on used, but this time like last time I have once again found that given the right rebates and deals, new vehicles are only 10-15% more expensive. Is anyone else noticing this? It's not the siginifcant 30-40% discount many often talk about.
Here's an example. We are looking at GMC Terrain's. A 2013 with 41k miles is listed at $21,206. Similarly I just got a call from a GMC salesmen that I have been in contact with and he said with their Black Friday deal I could get the same model, same features new (2015) for ~ 24k.
Now I guess there may be a little wiggle room on the used one, but I've always had trouble getting much off used vehicles.
So is anyone else noticing this? Same thing happened with my truck 2.5 years ago. I paid about 15% more, but got brand new instead of 3 years old with 40-60k miles on it.
We are looking to buy a car and I had originally been set on used, but this time like last time I have once again found that given the right rebates and deals, new vehicles are only 10-15% more expensive. Is anyone else noticing this? It's not the siginifcant 30-40% discount many often talk about.
Here's an example. We are looking at GMC Terrain's. A 2013 with 41k miles is listed at $21,206. Similarly I just got a call from a GMC salesmen that I have been in contact with and he said with their Black Friday deal I could get the same model, same features new (2015) for ~ 24k.
Now I guess there may be a little wiggle room on the used one, but I've always had trouble getting much off used vehicles.
So is anyone else noticing this? Same thing happened with my truck 2.5 years ago. I paid about 15% more, but got brand new instead of 3 years old with 40-60k miles on it.
GM is blowing out their 2015 inventory. I just bought a BRAND NEW CAMARO for $3k less than a 3 year old USED one. I got supplier discount, plus 15% off plus an additional $1k off...it was just crazy...and it's happening everywhere...with multiple makes.
It's basic supply & demand. People stopped buying cars in the Great Recession. Since cars are now better made, owners are holding onto their cars for more than 7 years on average. There simply aren't many late model used cars on the market. Most of the late model cars are luxury brands off lease. You can get those at a fairly big discount over new. You're not going to find many 3 year old full size pickups or Camry/Accords.
It all depends on the area where you live and obviously the make and model. Some cars drop like a rock from new to used... Check the Chevy Malibu. Some cars seem almost more expensive used...check the Subaru Outback.
AWD and 4WD in snowy areas hold there value more than they would in Texas. Each case is different but overall looking at the whole Auto industry a 3 year old car will be cheaper and you will not incur the initial 10% drive it off the lot depreciation.
Luxury off lease vehicles have the biggest depreciation and you can get a really nice car for about 60% of the MSRP.
Lexus, Audi, MB, BMW...these car values drop a lot in 3 years
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
