is 0 down really 0 down?

[SantaMar]

just curious as to the creative approach dealers use to get money out of us.  zero downpayment does not necessarily zero out of pocket for the keys to the vehicle to drive off the lot, correct?  there are dealer fees and other BS fees to get into the vehicle...whats the standard cost to get off the lot, assuming you do not need "downpayment" monies?  is any of that negotiable?

also, whats considered a decent credit score to auto lenders?  myfico members know decent scores but what kind of score will negate a lender asking for pay stubs and income verification?  i called a dealerhship because im in the market for a "baby car"...we spoke briefly and i explained the situation.  i told him my wife earns big money.  she has big savings.  i told him we are not ready to purchase a car today but maybe in 3-4 months.  i also said that 4 months from now my wife may techincally be laid off.  and technically wont have a weekly paystub.  she will have a solid w2/bank statements.  the dealership understood and told me that if the fico is good enough they wont even need income verification! 

so my question is what kind of FICO would you guess would negate income verification? of course if we are buying a new bmw at 790 a month thats a different story....im thinking more on the lines of 325-350 monthly car payment? 

[Revelate]

The minimum cost varies by state: use Google to see what fees are mandated by your state, and don't pay anything else generally.  Car registration and other mandatory things still need to be handled, any "BS" fees simply point to and say "no."

I couldn't tell you what tiers are where dealers will just hand you the keys, I'd be suspicious of anyone that said they would do so as unless the dealership is doing the financing (rare) a backend lender still has to accept it.  That said, tax returns or potentially bank statements can demonstrate it, so there's ways around it even if you don't have two recent paystubs.  End of the day, if you have cash, you can financing of some sort.

[Dustink]

Do not go with a zero down loan. Especially if income will be down after the new baby. You want to be in equity, not way upside down on the vehicle.

[genmic]

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@Revelate wrote:

The minimum cost varies by state: use Google to see what fees are mandated by your state, and don't pay anything else generally.  Car registration and other mandatory things still need to be handled, any "BS" fees simply point to and say "no."

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+1. And also, whether or not you can walk away with zero down has nothing to do with the dealer. That will depend on what financing you have, which of course depends on your credit score. Dealer's don't care how much money you put down, except in the cases where it might be needed for an approval and thus a car sale for them.

[mtrsprt]

ZERO down..... Translates to.... Higher payments and instant negative equity.   Sometimes a slightly higher interest rate also.  Dealers like to see money down.  The more the merrier (SP?).  It's instant money in their pocket.  You have a little more buying power with a good down payment.

[Revelate]

 

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@mtrsprt wrote:

ZERO down..... Translates to.... Higher payments and instant negative equity.   Sometimes a slightly higher interest rate also.  Dealers like to see money down.  The more the merrier (SP?).  It's instant money in their pocket.  You have a little more buying power with a good down payment.

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Eh, typically on a new car it's instant negative equity as soon as you drive off the lot: that's close to true even if you put 20% down in some cases.

Admittedly, zero down is something of a marketing ploy that sometimes may be packaged in a way that is actually favorable: like for example, taking said 0% down, and then immediately kicking whatever you would've used for a downpayement to the loan... thereby substantially accelerating your amortization curve and saving a bunch on interest, and often the larger the loan, often times the lower the interest rate will happen to be.  Doesn't always hold true with auto financing as you're right: banks would rather you have skin in the game.

Certainly if someone ever gives me the choice between 0 down and a lower interest rate than downpayment and a higher interest rate by some non-trivial amount, given that virtually all auto loans are simple interest (certainly any one that I would sign is), I'd be all over that deal, thank you very much mr. dealer and mr. bank; however, I would pull the above-mentioned stunt as soon as I had my online payment options setup.