0% Financing

[Save-n-Invest]

Dealers tell all kinds of stories of what you must do under certain circumstancess. Balderdash! You know what you are willing to pay. The dealer knows what they will take for the car. If you can't come to terms go elsewhere. Lots of cars and dealers. 

I always pay cash.  On one occasion a dealer pulled the deal when they finally believed I am a cash buyer. No problem. I bought elsewhere. My only regret there was that I wasted three days listening to the slaesman mumbling and lying. That should have been my first clue.

[Anonymous]

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@ridgebackpilot wrote:

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@Anonymous wrote:

Rates, like everything else, are negotiable. My Nissan dealer had a fancy metal sign that listed a minimum rate around 6%. They tried pointing to it as if to say, "Look, it's set in stone."

I got the 1.9% rate from their captive. It's just a negotiating tactic. The same is true of, "You have to pay MSRP."

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Exactly! Your best bet is to negotiate your price first, then discuss financing after you've secured the price you want.

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I do typically let the dealer know that I will consider financing through them. They sometimes offer a little better price on the car if they think they can make money on the financing. It's not my problem if they later discover they can't make anything.

The biggest issue buyers have with negotiations is emotion. Any emotion at all gives the dealer an opportunity. Don't think for a second that they'll be intimidated if you play tough or start yelling at them. What really drives them nuts is slow, calm, deliberate discussion. It took me a few tries to figure this out.

[joeyv1985]

Don't think for a second that they'll be intimidated if you play tough or start yelling at them. What really drives them nuts is slow, calm, deliberate discussion. It took me a few tries to figure this out.

Good Point. Thanks. 

[Anonymous]

I'm curious about this as well. My auto scores are 750+ on all bureaus and scoring versions. How much higher do I need to get it up before 0% is an option?

[Anonymous]

0% offers are captive lender promos. Capital One (for example) isn't going to offer you 0% regardless of how high your score gets.

[Brian_Earl_Spilner]

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@Anonymous wrote:

I'm curious about this as well. My auto scores are 750+ on all bureaus and scoring versions. How much higher do I need to get it up before 0% is an option?

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Depends on the manufacturer. Some require a 720 or 730 for tier 1, I have seen others go as low as 690. If you can't find the tiers online you can simply call and ask. Steer clear of a dealer where they won't give you that info. They basically want to get you in so they can work on you.

[RootDet]

I am buying a car right now and I am a bit mean. So I always go in with a pre-approval and I am upfront about that. I select the lender to apply with so I get the best rate. This round I walked in with Navy and 2.29%.

I do negotiate the price first and check multiple dealers. But as others mentioned you could still get 0%, and if they want the sale bad enough, the tradein can be valued higher to offset rebate loss. No body pays MSRP even with financing, so if your paying msrp, keep walking. You can even sometimes get the dealer to kickback some profit on them doing financing, 

But at some point, you need to do the math. With the reality that you do indeed lose the customer cash incentives, the amount you lose could be greater than what you finance.  If the cashback deal is $5k and your financing at lets say 3.9%, 25k, 60 months, you would pay 2,557.14 in interest. Would you rather take the $5k, pay 2,557.14 in interest, or give the $5k back and save $2,557.14 interest?

Always look at the big picture to figure out if the deal I right for you. 

[joeyv1985]

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@RootDet wrote:

I am buying a car right now and I am a bit mean. So I always go in with a pre-approval and I am upfront about that. I select the lender to apply with so I get the best rate. This round I walked in with Navy and 2.29%.

I do negotiate the price first and check multiple dealers. But as others mentioned you could still get 0%, and if they want the sale bad enough, the tradein can be valued higher to offset rebate loss. No body pays MSRP even with financing, so if your paying msrp, keep walking. You can even sometimes get the dealer to kickback some profit on them doing financing, 

But at some point, you need to do the math. With the reality that you do indeed lose the customer cash incentives, the amount you lose could be greater than what you finance.  If the cashback deal is $5k and your financing at lets say 3.9%, 25k, 60 months, you would pay 2,557.14 in interest. Would you rather take the $5k, pay 2,557.14 in interest, or give the $5k back and save $2,557.14 interest?

Always look at the big picture to figure out if the deal I right for you. 

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Thank you. As always, "saving money" is a relative term. I'm sure when working the #'s, there's a figure that's equitable for everyone. 

[Anonymous]

I just purchased a CPO 2017 RAV4 and got 0% financing through Toyota motor credit for 60 months. Almost unheard of on a used vehicle. Finance guy looked up in his book and told me that the minimum score for 0% financing was 690.

[Anonymous]

My lease is up in March so I've been considering paying it off and keeping it, turning it in and buying a Tesla, or turning it in and buying a hybrid SUV. I hadn't considered the possibility of 0% financing, which I think would push me to buy a new car, probably a Lexus hybrid. Any idea whether their tiers are similar to Toyota's?