Is 0% financing really free?

[Nancy]

Meh, part of the problem is the psychology of buyers. One reason that Saturn never took off is that people still want to feel like they got a special deal. If you talk to almost anyone who buys a car they will tell you how they got a special deal on their vehicle. In reality, no body gets a special deal. If you get good financing, you lose out on the rebate. If you take the rebate, you lose out on financing. If you are particularly cunning and get both a rebate and the financing, they'll take it out on your trade in value.

There are a couple of big downsides to the low-rate financing. One is that people have lost touch with the open market cost of a secured auto loan, which is more like 6 to 10%. Carmakers probably don't pay quite that much, but the cost of financing ends up being quite a bit higher than 0%, and this gets buried in the price somewhere. So, you don't realize exactly how much that big auto loan actually is costing you.

The second downside is that, if you prepay the loan early (e.g. you decide to sell the car), you lose out quite a bit versus if you had taken the rebate.

[DementedReality]

my problem with buying a car isnt that they make a profit or even if i know how much they make. thats their business, i dont know how much profit anything else I buy produces for the firm I am buying from and i dont care. in fact if they dont make a profit, they wont be there when i need to buy something, so this isnt my issue.

my issue is the BS in the business office.

1) why should i pay an administration fee? thats your cost of doing business, do i pay Safeway a "checkout fee"? well dont they have costs for checking out? i dont know how Auto dealerships justify this.

2) the bartering BS. if you cant say yes, i dont want to negotiate with you. however, its always this crap where they give you their line how they want to get the best price and have to go talk to the manager. meanwhile, i know its a tactic to make the customer sit there longer then neccesary. i want to talk to the person who can say yes, not the go between.

3) so the sales guy tells me what a great product their cars are and the business manager then tries to sell me stuff to protect my seats and undercoating and paint etc ... what happened the quality? the dealer and manufacturer should be applying all those extra's to protect the integrity of their product and it should be built into the final price of the car.

4) i hate the entire negotiation process, the tricks, the mind games and the fact they think you are stupid.

its the most dreaded purchase ever. my simple rule of thumb, if you drive off a lot with a car,you lost. just bring the lube, it makes it easier.

with all due respect to our resident car salesman.

[Sample00]

please see below for my responses to your concerns.

Originally Posted by DementedReality

my problem with buying a car isnt that they make a profit or even if i know how much they make. thats their business, i dont know how much profit anything else I buy produces for the firm I am buying from and i dont care. in fact if they dont make a profit, they wont be there when i need to buy something, so this isnt my issue.

my issue is the BS in the business office.

1) why should i pay an administration fee? thats your cost of doing business, do i pay Safeway a "checkout fee"? well dont they have costs for checking out? i dont know how Auto dealerships justify this. couldnt agree more, it is BS. Profit margin should more than cover the "admin" fee. Finance companies will have an admin fee for doing the paperwork. Those costs are designed to cover off such things as long distance phone calls, vehicle lien registration etc. In my opinion, they shouldnt charge that either. Finance companies make their money off the interest rates they charge. Cover the "Admin Fee" in your interest rate.

2) the bartering BS. if you cant say yes, i dont want to negotiate with you. however, its always this crap where they give you their line how they want to get the best price and have to go talk to the manager. meanwhile, i know its a tactic to make the customer sit there longer then neccesary. i want to talk to the person who can say yes, not the go between. Most times, the bartering thing with a salesperson and then having to go to the Manager is a rue. As we own a lil used car dealership, guess what?, I get to make that decision whether I am going to sell you the car at the price you offered me.

3) so the sales guy tells me what a great product their cars are and the business manager then tries to sell me stuff to protect my seats and undercoating and paint etc ... what happened the quality? the dealer and manufacturer should be applying all those extra's to protect the integrity of their product and it should be built into the final price of the car. Scotch guard, what a joke! again, I agree with you that those things should be included in the price of the vehicle. I would think most people wouldnt mind paying a bit more for the unit if all those things were already put in place. The Big auto makers should build those things into the cost price of the vehicles that they sell to the dealership.

4) i hate the entire negotiation process, the tricks, the mind games and the fact they think you are stupid. The whole concept of negotiation for the purchase of a vehicle has been in place since vehicle sales actually started. or anything else that you can dicker on for that matter. Personally, I like the approach of, heres the price we are asking for our vehicle. Its a starting point. I will tell you in no uncertain terms what the absolute bottom price is for our vehicle. If you dont like that price, then you are free to go elsewhere. Why do we have a sticker price then? Cause we have found that most people want to barter on the price and we needed a starting point. We get to a point though, where if someone asks me what the bottom line is...I will tell them and that really is the bottom line. After that, you either buy the vehicle or you dont.

its the most dreaded purchase ever. my simple rule of thumb, if you drive off a lot with a car,you lost. just bring the lube, it makes it easier.

with all due respect to our resident car salesman. I'm feeling the love now!

[Bertuzzied]

Hyundai currently has the 0% financing and the cash rebates. Never thought i would buy a korean car. Just wished the vera cruz was at 0%.