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Sure, but the "final bottom-line price" includes the value of the financing. If a bank would charge you 4%, then on a 5-year loan for a $30K car, 0% financing
by perl4ever 7y ago
Sure, but the "final bottom-line price" includes the value of the financing.
If a bank would charge you 4%, then on a 5-year loan for a $30K car, 0% financing is worth on the order of $3,000.
I'd regard the interest rate as fictitious on its own, but it goes into your calculation to determine how good your deal is for comparison.
- chrisseaton 7y ago> 0% financing is worth on the order of $3,000 It doesn’t make any sense to think about it like this - the finance isn’t available without the car and if you want the car without the finance you will suddenly find the price of the car can be lower. They aren’t two separate things. It’s one price!
- perl4ever 7y agoIt's useless to negotiate it separately; I understand that. Even though the provided interest rate, the price of the car, and the trade-in value (if any) are fictitious numbers, they still go into your bottom line cost.
- chrisseaton 7y agoSo why say ‘wow the finance is 0%’? The cost of finance is meaningless on its own. I could be paying 20% finance and be getting a better deal than you paying 0% finance.
- cjhopman 7y agoBecause in the real world those scenarios don't happen. We can go all day making up ridiculous wild scenarios and working out the math of how they compare, or we can stick to what people actually experience when buying cars.