I got an email today from my local dealer that is trying to get me to pull the trigger on buying a TL.
They are offereing 0% interest for the life of the loan and no down payment. They claim to be willing to do whatever it takes to get you approved. I'm sure that you have to have pretty good credit.
Just wondering if that was a deal that nationwide or just something being done locally?

 

Sounds shady to me.

 

Here is a quote from the email.

This is a very limited time offer and may not be used in conjunction with any
other previously discounted offers. THERE IS NO DOWN
PAYMENT REQUIRED ON THIS OFFER-ONLY BANK APPROVAL IS NEEDED AND WE WILL WORK
VERY HARD TO QUALIFY
EVERYONE FOR THIS OUTSTANDING 0% PROGRAM

It came the Internet Sales manager.

 

Clearly, banks can't make an offer of "free money" unless they plan on going out of business. What's happening is that the dealer is pre-paying the interest, buying down the rate to zero. It's like paying "points" on a mortgage to buy down the rate. So you're paying more for the vehicle in profit to the dealer, so they can buy down the rate, in effect.

 

That would explain why it is very hard to qualify.

 

If you can negotiate a good price FIRST, then try to get the deal it may be worth it. But, more than likely the dealer will backout of any great discount they may have previously offered. Just tell them your paying cash and try to get the best deal you can. Then at the end, try for the ZERO percent.

 

Most 0% loans are a "hook" to get you in the dealers showroom. Either they are very short term (24 months) or only Bill Gates qualifies. Once you and your desire for the car are there, the real numbers will appear.

 

what michael3314 said

 

Maybe the bank is giving them a kickback in some other way for getting X number of people in on this deal.
I emailed them back and asked what type of beacon score you have to have in order to qualify for this deal but haven't heard anything yet. I'll keep you posted on what they say.
Ya'll are probably right though.

 

92NSX, I think your logic is reversed. As others have said, why would the bank be paying a kickback on a 0% loan? If anything, it would be the dealer paying the bank.

 

You ususally can't take a zero point offer and a discount. One or the other.

 

I'm so confused.

 

There is nothing to be confused about.

Find out how much price of the car is with the 0% financing and you will know if it is a good deal or not.

If you can get the car for the same amount that others can paying cash out of pocket or financing with a third party, it is a good deal.

If you have to pay more, that represents the finance charge and you would not really be getting 0% interest, but rather paying interest equal to the amount you have to pay extra to get 0%.

 

^^^^^^^^^^^^^^^^
Thanks for explaining that.