@nycsimone wrote:If you take the 0% financing and put all that money in a high-yield savings account that pays 1.25% (you can make much more by investing your money in other ventures btw) after the 72 months you'd have $1,520 left in your bank account and you accomplished the same exact thing.
I tried to tell him the same thing, but I don't think he understands our point. If he had invested his cash in Tesla stock rather than a depreciating car, he would have been able to cover his 0% APR car payments from his investment gains with money left over!
@nycsimone wrote:If you choose 0% financing there's no markup...that's why it's 0% financing. In this case the dealership is paid a flat fee for the financing (many banks are moving to this anyways).
If you were offered 0% financing on a $40,000 vehicle and paid cash rather than just make payments you could lose out in thousands in interest. A standard loan is 72 months nowadays. So you can pay the $40,000 cash or take 0% interest financing.
If you take the 0% financing and put all that money in a high-yield savings account that pays 1.25% (you can make much more by investing your money in other ventures btw) after the 72 months you'd have $1,520 left in your bank account and you accomplished the same exact thing.
Seventy-two months to pay off a car gives me the willies. In my world that person bought too much car. That is for me only not other buyers. I was only willing to go ten years on a home mortgage. In the high yield saving account example $1520.00 i just not worth it to me as trade off for endless car payments.
I am an investor. Market has some interesting swings. I'm a long hauler so it works well for me. I would not like to be forced to sell on the downswing to make a car payment.
GM was offering 0% and the rebate when I bought my daily. The dealer marked it up on the paperwork the salesman showed me. I didn't put a pencil to it but it looked like about 3%.
If I am ever in a situation that requires me to finance a car it would be basic transpo. No frills just getting from point a to point b. Preferably I could find a private sale with complete service records. My indy would do a thorough PPI. If he was ok with the car I would move forward.
When I posted that I don't see the issue that was in reference to a cash buyer from time to time. It's still a sale and adds to the sales count for compensation. A buyer scooping up everything presented in the F&I office is more pofitable but a little bit is better than nada.
Some of us are just incorrigible. 
@Save-n-Invest wrote:
@nycsimone wrote:If you choose 0% financing there's no markup...that's why it's 0% financing. In this case the dealership is paid a flat fee for the financing (many banks are moving to this anyways).
If you were offered 0% financing on a $40,000 vehicle and paid cash rather than just make payments you could lose out in thousands in interest. A standard loan is 72 months nowadays. So you can pay the $40,000 cash or take 0% interest financing.
If you take the 0% financing and put all that money in a high-yield savings account that pays 1.25% (you can make much more by investing your money in other ventures btw) after the 72 months you'd have $1,520 left in your bank account and you accomplished the same exact thing.
Seventy-two months to pay off a car gives me the willies. In my world that person bought too much car. That is for me only not other buyers. I was only willing to go ten years on a home mortgage. In the high yield saving account example $1520.00 i just not worth it to me as trade off for endless car payments.
I am an investor. Market has some interesting swings. I'm a long hauler so it works well for me. I would not like to be forced to sell on the downswing to make a car payment.
GM was offering 0% and the rebate when I bought my daily. The dealer marked it up on the paperwork the salesman showed me. I didn't put a pencil to it but it looked like about 3%.
If I am ever in a situation that requires me to finance a car it would be basic transpo. No frills just getting from point a to point b. Preferably I could find a private sale with complete service records. My indy would do a thorough PPI. If he was ok with the car I would move forward.
When I posted that I don't see the issue that was in reference to a cash buyer from time to time. It's still a sale and adds to the sales count for compensation. A buyer scooping up everything presented in the F&I office is more pofitable but a little bit is better than nada.
Some of us are just incorrigible.
1. How does 72 months to pay off a car give you the willies? You can literally put all that money in an account, set up auto pay...and forget all about it. This just makes no sense.
2. 0% finance is a captive inventive from the financial arm of the car manufacturer...it's NOT marked up. Even if it were somehow possible to mark it up the limit is 2.5%. 3% is just not possible. But again, if you select the 0% financing...then it's 0%. It doesn't get any simpler then that.
@ridgebackpilot wrote:
@Save-n-Invest wrote:
The last time I bought a car (the kid bugging me to buy a black car) the manufacturer was offering 0% financing. The kid brought a demo to the house for a test drive. We stopped along the way at Panera to look over his paperwork for the deal we struck on the phone. Of course he had financing info for the 0%. The numbers did not compute. I don't think they realize we can do math in our heads.
On the drive back he started with the nitrogen fill for tires and other nonsense. If I wanted a bunch of useless nonsense I would have tuned into QVC. It was a cash deal, no foolishness just doc fees. I don't have any reason to make an opera of a car purchase. It's a personal preference not a standard for others.
Just imagine: If you had taken their 0% financing deal and invested your cash in Tesla stock instead of a depreciating car, you'd have earned enough to be able to buy three or four cars by now! This principle is known as the "cost of capital" and it's a very real phenomenon.
Or Tesla could have done nothing. Maybe Apple won't skyrocket after the upcoming split. You never know.