I don’t see any comments about a free car, not sure to what you’re referencing.
The “no free lunch” is a economics principle, no one is giving away anything for free, even as small as a free lunch. Regarding 0% auto loans… these are just another marketing scheme designed to sell more cars because some subset of consumers reported they didn’t want to pay loan interest. Marketing hears that, says great, we’ll design a system where you won’t pay any interest. If it sounds too good to be true, it usually is… except when a billion dollar corporation is the one offering the *great deal, then you can rest assured it’s absolutely too good to be true. Although you’re not paying interest, the total loan amount will be comparable to someone with a similar credit score who is paying the interest rate you would have received had you gone that route.
If you’re making monthly payments, you’re paying more than you would of had you purchased the vehicle outright. This difference is money that could have earned interest in a bank or a return on another financial investment.
Edit: If you can’t afford to buy the vehicle outright, you probably shouldn’t be buying it.
Every once in a while there are multiple parties structuring a deal where someone is left with a bad deal when it’s all said and done. As a consumer, you just have to make sure it’s not you.
But take, for example, the early days of Moviepass. You pay a cheap subscription to a service, and they buy you unlimited mobile tickets at the theater. Too good to be true in the long term, but in the short term it was a good way to spend some money that venture capitalists were giving away basically for free.
Businesses aren’t always smart. Sometimes they make financial mistakes and it’s your duty as a responsible consumer to punish those businesses for those mistakes.
In the case of dealer/manufacturer/financing incentives and the individual salesman commission, sometimes the kickback/fee scheme leaves someone else holding the bag. If you can negotiate a lower sticker price because it comes with some predatory terms on financing, but there’s no penalty for prepayment, it might make the most sense to take the low sticker price (made possible by the lender paying the dealer a kickback for the loans), finance at high rates, and then pay the whole thing off as soon as you can, so that you get the “discount” without having to pay high interest/fees, then you walk away with a good deal in exchange for just a little bit more hassle and paperwork. Sometimes the incentives swing the other way, too, where the lender is affiliated with the manufacturer and needs to juice sales volume by offering below-market rates on financing. As long as you can actually see how everything works and you can find the pain point, it may be possible to get a good deal and dump the bad deal on some faceless corporation for them to worry about.
they’re definitely making less margin and there are plenty of loss lead situations or outside pressures in the short term
you can see what the car was selling for prior months so I’m not sure how much you think it could be increased without it being obvious? (steam sales come to mind)
better argument would be how much they think they’d lose not selling current inventory and what you could potentially haggle the price down to vs you don’t for this deal but that’s insider info I would not have
and I did haggle that some as well anyway
beyond that, if i was that price sensitive, i would not be buying new
but i’ve seen so many people chase a better deal into future problems
Yeah, now don’t get me wrong, you can get some deals on cars when dealers see the lot space as increasingly valuable compared to the car on it, but they’re salespeople, they’ll swear up and down that that’s the case no matter what the situation is.
You want to know how you can tell you got a good deal? You compare it to what similar vehicles are being sold for at other places, you have an independent mechanic check it out (an honest dealer will be perfectly happy with you doing that), and you ask a trusted financial institution (ideally a credit union) what they would loan you for it. In general you trust that everything a car salesperson is doing that sounds good is to keep your eyes on the hand that isn’t in your pocket.
When buying used you shouldn’t trust any dealer at their word. When buying new yeah you should be able to trust the oem. Unless you buy American, then caveat emptor, don’t know why you thought Ford suddenly started using quality control.
yea i’ma gonna take my actual research over some vague logic and feels even if i agree in principle, vaguely hand waving about bad deals while eating interest for the same otherwise price is lol
0 percent interest auto loans are a thing
There’s no such thing as a free lunch.
who said the car was free?
you’re just not paying interest
I don’t see any comments about a free car, not sure to what you’re referencing.
The “no free lunch” is a economics principle, no one is giving away anything for free, even as small as a free lunch. Regarding 0% auto loans… these are just another marketing scheme designed to sell more cars because some subset of consumers reported they didn’t want to pay loan interest. Marketing hears that, says great, we’ll design a system where you won’t pay any interest. If it sounds too good to be true, it usually is… except when a billion dollar corporation is the one offering the *great deal, then you can rest assured it’s absolutely too good to be true. Although you’re not paying interest, the total loan amount will be comparable to someone with a similar credit score who is paying the interest rate you would have received had you gone that route.
If you’re making monthly payments, you’re paying more than you would of had you purchased the vehicle outright. This difference is money that could have earned interest in a bank or a return on another financial investment.
Edit: If you can’t afford to buy the vehicle outright, you probably shouldn’t be buying it.
i imagine you being this obtuse is a byproduct of being so far up your own ass
as to why take a no interest loan when i can buy outright, look up time value money
the research i did for both the current model and few years back showed i paid below market average
but yea i am sure you know better with zero specific details
hell credit arbitrage alone would be like 15k and that’s really conservative
… yikes.
lol
You seriously believe a car dealer is losing money?
A car loan is principal and interest. You got a 0% “deal”, you overpaid on the principal.
Every once in a while there are multiple parties structuring a deal where someone is left with a bad deal when it’s all said and done. As a consumer, you just have to make sure it’s not you.
But take, for example, the early days of Moviepass. You pay a cheap subscription to a service, and they buy you unlimited mobile tickets at the theater. Too good to be true in the long term, but in the short term it was a good way to spend some money that venture capitalists were giving away basically for free.
Businesses aren’t always smart. Sometimes they make financial mistakes and it’s your duty as a responsible consumer to punish those businesses for those mistakes.
In the case of dealer/manufacturer/financing incentives and the individual salesman commission, sometimes the kickback/fee scheme leaves someone else holding the bag. If you can negotiate a lower sticker price because it comes with some predatory terms on financing, but there’s no penalty for prepayment, it might make the most sense to take the low sticker price (made possible by the lender paying the dealer a kickback for the loans), finance at high rates, and then pay the whole thing off as soon as you can, so that you get the “discount” without having to pay high interest/fees, then you walk away with a good deal in exchange for just a little bit more hassle and paperwork. Sometimes the incentives swing the other way, too, where the lender is affiliated with the manufacturer and needs to juice sales volume by offering below-market rates on financing. As long as you can actually see how everything works and you can find the pain point, it may be possible to get a good deal and dump the bad deal on some faceless corporation for them to worry about.
it can be as simple as selling at cost / relatively small loss keeping you in an ecosystem for future knock on profits
not as common in cars but plenty of examples in retail
they’re definitely making less margin and there are plenty of loss lead situations or outside pressures in the short term
you can see what the car was selling for prior months so I’m not sure how much you think it could be increased without it being obvious? (steam sales come to mind)
better argument would be how much they think they’d lose not selling current inventory and what you could potentially haggle the price down to vs you don’t for this deal but that’s insider info I would not have
and I did haggle that some as well anyway
beyond that, if i was that price sensitive, i would not be buying new
but i’ve seen so many people chase a better deal into future problems
Yeah, now don’t get me wrong, you can get some deals on cars when dealers see the lot space as increasingly valuable compared to the car on it, but they’re salespeople, they’ll swear up and down that that’s the case no matter what the situation is.
You want to know how you can tell you got a good deal? You compare it to what similar vehicles are being sold for at other places, you have an independent mechanic check it out (an honest dealer will be perfectly happy with you doing that), and you ask a trusted financial institution (ideally a credit union) what they would loan you for it. In general you trust that everything a
carsalesperson is doing that sounds good is to keep your eyes on the hand that isn’t in your pocket.if you’re having to get another mechanic to look at it, i’d probably not come back
already said fuck you to honda ever again for this kinda behavior
When buying used you shouldn’t trust any dealer at their word. When buying new yeah you should be able to trust the oem. Unless you buy American, then caveat emptor, don’t know why you thought Ford suddenly started using quality control.
yea truth, i am not trusting of american car quality
No they aren’t, maybe technically but no one is lending money for free, aside from Klarna whose business model is preying on those that can’t pay back
During covid my coworker for a 0% interest loan on a 2016 4runner TRD pro. It was for 80k.
Dudes chilling, taking his time to pay it off, saving for a house.
They exist, I just don’t know how he pulled it off.
Every dollar of interest subsidies manufacturers give is a dollar they cut from discounts and other incentives.
where is this world of perfect information you have about car prices?
far as i know i paid under regional prices on the average before even the no interest
but if you have a source i’ll take it
It’s called critical thinking and common sense. Don’t be a sea lion.
yea i’ma gonna take my actual research over some vague logic and feels even if i agree in principle, vaguely hand waving about bad deals while eating interest for the same otherwise price is lol