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That’s a bit incorrect from the POV of the dealer, the loan company pays them the cash for the car (and commissions) and takes the cash flow. A 0% loan doesn’t
by _3u10 5y ago
That’s a bit incorrect from the POV of the dealer, the loan company pays them the cash for the car (and commissions) and takes the cash flow.
A 0% loan doesn’t necessarily mean you’re paying more, there are often factory incentives and other issues. Basically modern manufacturing is highly capital intensive with low cost of reproduction. By selling more vehicles they amortize the cost the factory across more vehicles. Also many of the cars have already been produced and the factory and dealer are looking at selling that car new vs selling a year old car with no mileage.
- kazinator 5y agoEven if the 0% loans are there to incentivize people to get into car ownership who can't put up the cash, thereby moving more cars, that makes no difference. That incentivizing costs money, and the car is more expensive because of it. The buyer who is not incentivized by "0% financing for X period", because they are paying with cash, shouldn't have to pay the cost of those incentivies, and thus expects to pay less.