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Many of the major brands are offering insane deals. Kia, for example is offering 120 days until first payment plus 0% financing for 72 months. Meanwhile Subaru
by ericcholis 6y ago
Many of the major brands are offering insane deals. Kia, for example is offering 120 days until first payment plus 0% financing for 72 months.
Meanwhile Subaru, per usual, is offering on the low-end compared to what others are doing. 0% for 63 months. They never budge on financing or offers.
- londons_explore 6y agoI hate 0 percent loans. I wish a service existed that I would pay a lump sum of upfront cash to, and they'd sort out all the loan paperwork, etc. Obviously if it's a 60 month 0% loan, I want to pay the sticker price minus the return on a 2.5 year fed bond...
- alasdair_ 6y agoThe rate of return on federal bonds right now is around 0.65% so you’d basically be paying the sticker price.
- mhb 6y agoYou can get over 1.5% on 3 year CDs: https://www.interest.com/savings/cd/rates/ https://www.interest.com/savings/cd/rates/
- Spivak 6y agoIsn’t that what dealerships call “bonus cash”? Like you have to run the numbers yourself but you can use that as a point of negotiation if you’re buying outright. Also 0% loans are fantastic for your credit! I take them as much as possible because it’s a free credit score bump.
- addicted 6y agoWhy couldn’t you just put the sticker price you’re wanting to pay upfront into the 2.5 year bond instead?
- jedberg 6y agoWhy? If you have the principle just invest it yourself and then pay off the loan with an auto payment each month from that same principle.
- amiga_500 6y agoI wonder if anything will shake the idea that the stock market is a one way trip? We are back to 2016 on the NYSE right now.
- jameslevy 6y agoYou can take both long and short positions. Although it seems that most people (almost everyone) shouldn't try to get too fancy with this.
- amiga_500 6y agoShort with the principal on a car? Here is what needs to happen: the vast majority of people need a steady job that sees them afford a car. They need to not be "financially literate" because the vast majority of options open to them are not financial footguns, and we need a world where playing financial games doesn't make or break a person. What was it Henry Ford did? a. gave all his workers a Robinhood account so they could play derivatives and try to afford one of his cars b. paid his workers enough to buy a car
- vasco 6y agoThis is a very US centric view of the world - whose gotten itself into a corner with urban planning centered around cars. People don't need cars, they need mobility and the ability to get around their surroundings efficiently. If we're making up solutions to the world, by all means raise salaries if you can, but I wouldn't center our goals around car ownership. Walk around, ride a bycicle, use public transportation.
- amiga_500 6y ago
- maxerickson 6y agoI guess the sellers won't always go with it, but you can arrange loan terms at a bank or credit union prior to shopping. For example, even huge banks do this: https://www.bankofamerica.com/auto-loans/ https://www.bankofamerica.com/auto-loans/ Smaller places might have a car buyer that does everything for you. Really, the trick is to get a good price on the vehicle and then convince the dealer that you don't want their dirty, obfuscated, expensive loan.
- johnvanommen 6y agoA lot of this is because they want to maintain the status of the cars they sell. For instance, the Honda Accord outsells the Chevy Malibu by ten-to-one. Instead of simply selling the Malibu for a lower price, Chevy wheels and deals on the rebates and the financing.
- PhantomGremlin 6y agoObviously if it's a 60 month 0% loan, I want to pay the sticker price minus the return on a 2.5 year fed bond... This sentiment makes some sense during normal times, but we're now back in ZIRP. As of this week, a 2.5 yr treasury bond pays about 0.25%. On $40,000 that's $100 per year. https://www.bankrate.com/rates/interest-rates/treasury.aspx https://www.bankrate.com/rates/interest-rates/treasury.aspx On a $40,000 vehicle, negotiating a $1,000 reduction in purchase price would dwarf any considerations of "the return" on a treasury bond.
- loeg 6y agoKia/Hyundai were doing similar promotions last summer, no COVID in sight. It's just something they do to drive sales numbers.
- WJW 6y agoHow is that an insane deal? Like someone in a sister thread mentioned, the interest rates are so low that paying later has very little benefit since you can barely invest the money anywhere else. All this does is make you pay the same amount a little bit later.
- nine_k 6y agoWhy invest. By that time, you may have finally accumulated enough to start paying, and just drive for 5 years for free, while barely making ends meet.
- zapttt 6y agoI have no idea what you are talking. after 120 days you start to pay what you would normaly pay, the only difference os that will stop paying a little ity bit sooner because you won't pay over the car cost to pay for the 3-20pct interest rate. it is exactly the same value and length of payments as before. nothing changed on the monthly prices on those deals. nothing will allow to drive for free for five years or whatever.
- PaulWaldman 6y agoA little more personal, but it may help with ones cash flow. Also in times of high inflation, delaying payments is beneficial.
- sk5t 6y agoTrue for inflation, but what we're more accustomed to seeing lately is stagflation.
- ikeyany 6y agoNot to sound like an asshole, but paying later has a pretty clear benefit if money is tight now.
- roland35 6y ago0% is very nice, but oftentimes there is a cash rebate alternative. On my last purchase (last model year Volt before they were discontinued) I could take 0% or $8,000k off. I took the 8k!
- SOLAR_FIELDS 6y agoOftentimes you can take the rebate and then turn around and refinance the vehicle for a lower rate after a year or so as well.
- sgerenser 6y agoAlso bought a Volt. Also took the rebate, refinanced after just a couple weeks. Finance guy at the dealership was probably not happy.
- argonaut 6y ago0% has been common for years. 2015-2018 they were super common. Only the automaker offers these loans, and it's because they just take the loss out of their profit margin.