Username or Email Address
Do you already have an account?
Forgot your password?
  • Log in or Sign up

    VWVortex


    Results 1 to 13 of 13

    Thread: Is 0% car financing really 0%?

    1. Junior Member
      Join Date
      Aug 14th, 2008
      Location
      Germantown, MD
      Posts
      38
      12-21-2010 09:03 AM #1
      Well, this past weekend I went to go check out a new Maxima with my buddy that is in need of a new car. I went in skeptical as they, along with a number of other brands are offering 0% financing for 5 years. All in all, it appears you are still paying 1.7% interest (or call it fees) as it seems all dealers have a little blurp at the bottom of the forms

      "Customer may choose either APR or cash back only option. Financing is subject to NMAC Tier 0 through Tier 2 credit approval. $16.67 per month per $1,000 borrowed at 0.0% for 60 months, $14.71 per month per $1,000 borrowed at 1.9% for 72 months, on all new above-noted vehicles in dealer stock. Down payment may be required."

      My question to you guys is, have any of you been able to negotiate the fees?

    2. Member robr2's Avatar
      Join Date
      May 5th, 2005
      Location
      Boston
      Posts
      5,854
      Vehicles
      2005 Passat Variant
      12-21-2010 09:21 AM #2
      That is Nissan's offer. 0% for 60 months works out to be $16.67 per thousand borrowed.

      The 1.9% offer is for 72 months.

      I don't see a fee.

    3. Senior Member Hostile's Avatar
      Join Date
      May 29th, 2002
      Location
      NoVA
      Posts
      28,984
      Vehicles
      '15 STi & '13 GTI
      12-21-2010 09:27 AM #3
      Quote Originally Posted by robr2 View Post
      That is Nissan's offer. 0% for 60 months works out to be $16.67 per thousand borrowed.
      Really dumb/basic question - What is the $16.67 per thousand borrowed for?

    4. Junior Member
      Join Date
      Aug 14th, 2008
      Location
      Germantown, MD
      Posts
      38
      12-21-2010 09:37 AM #4
      Its a financing fee for every $1,000 borrowed, at least that is my understanding.

    5. Moderator rs4-380's Avatar
      Join Date
      Dec 12th, 2000
      Location
      Maine
      Posts
      22,906
      Vehicles
      VWs & Audis
      12-21-2010 11:51 AM #5
      Quote Originally Posted by Hostile View Post
      Really dumb/basic question - What is the $16.67 per thousand borrowed for?
      all it means it that you pay 16.67 per month for every 1000 you borrow. If you borrow 10000 dollars you pay 166.70 per month for 60 months. Do the math and you will see that the full repayment over the life of the loan is exactly what you borrowed (ie 0% interest). You will see rates quoted like this alot because it makes it easy for the average individual (not taking a shot at you) to figure out what their monthly payment will be.

      there is no "fee".
      Dave

    6. Senior Member SAPJetta's Avatar
      Join Date
      Feb 3rd, 2001
      Location
      East Bay, CA
      Posts
      27,022
      Vehicles
      2008 Rabbit S(low), 2012 Outback 2.5 Premium
      12-21-2010 11:55 AM #6
      Quote Originally Posted by rs4-380 View Post
      all it means it that you pay 16.67 per month for every 1000 you borrow. If you borrow 10000 dollars you pay 166.70 per month for 60 months. Do the math and you will see that the full repayment over the life of the loan is exactly what you borrowed (ie 0% interest). You will see rates quoted like this alot because it makes it easy for the average individual (not taking a shot at you) to figure out what their monthly payment will be.

      there is no "fee".
      This ^^^

      Where are we going and why am I in this handbasket?

    7. Senior Member
      Join Date
      Mar 24th, 2001
      Posts
      26,439
      12-21-2010 12:15 PM #7
      Quote Originally Posted by Hostile View Post
      Really dumb/basic question - What is the $16.67 per thousand borrowed for?
      Principal + interest (which is just principal if it is a 0% interest loan)

      $16.67 per month * 60 months = $1,000.20

      So if you borrow $1,000 at 0% for 60 months, you will pay $16.67 per month ($16.47 for the 60th month) until you pay off the loan.

    8. Junior Member
      Join Date
      Aug 14th, 2008
      Location
      Germantown, MD
      Posts
      38
      12-21-2010 12:22 PM #8
      ahh now I understand, I thought it was in addition to the repayments, thanks guys!

    9. Member jnm2.0t's Avatar
      Join Date
      Oct 2nd, 2005
      Location
      Sunnyvale CA
      Posts
      17,324
      Vehicles
      List your car(s) owned here
      12-22-2010 03:12 PM #9
      other way to think of it is what is $1000 / 60 months... $16.66666... rounded to $16.67
      Take my fusion hybrid, please! Blue 2013 titanium package, goes to the first person that will take it for only what is owed. PM me if serious.

      I'm just a regular Joe, with a regular job. I'm your average white, suburbanite slob.

    10. Moderator Rockhead261's Avatar
      Join Date
      Jan 5th, 2004
      Location
      Brewster, New York
      Posts
      3,936
      Vehicles
      '75 Eldorado vert, '13 Sierra Denali CC D/A, '11 Outback 3.6R
      12-28-2010 06:43 AM #10
      Now that the payment formula has been explained....

      There is no such thing as a free lunch.

      0% financing simply means the dealer/bank is making money somewhere else. Perhaps they are a little less generous with their bottom price. "Invoice" pricing is not dealer cost, and even dealer cost does not take in to account "manufacturer holdback" or other kickers that go to volume dealers. Are you getting hit with dealer prep, destination fees, or a warranty extension?

      0% is still a sweet deal regardless... you're going to pay the little tack on fees regardless of the APR.
      Cary

      '13 Sierra Denali 2500 CC D/A
      '11 Outback 3.6R
      '12 FLHTCUI
      '75 Eldorado ragtop

      Forum Rules

    11. Member
      Join Date
      Feb 12th, 2001
      Location
      douglasville, GA
      Posts
      2,520
      Vehicles
      92 vw corrado
      12-28-2010 06:54 AM #11
      "Customer may choose either APR or cash back only option.

      The customer is given a choice of the 0% or the cash back option. Bet the cash back is more than you would have paid in financing interest if you went with higher than 0 interest rate. So you are paying more for the car to get the 0% rate.

      depending on the vehicle it looks like cash backis anywhere from 750 to 4000. Gotta run the numbers on whatever private financing you can get and see what works out.
      Last edited by twilk; 12-28-2010 at 06:59 AM.

    12. Member
      Join Date
      Dec 9th, 1999
      Location
      West Chester, PA
      Posts
      6,122
      Vehicles
      '01 S2K, '05 3, '12 TSX
      12-28-2010 11:23 AM #12
      Quote Originally Posted by Rockhead261 View Post
      Now that the payment formula has been explained....

      There is no such thing as a free lunch.

      0% financing simply means the dealer/bank is making money somewhere else. Perhaps they are a little less generous with their bottom price. "Invoice" pricing is not dealer cost, and even dealer cost does not take in to account "manufacturer holdback" or other kickers that go to volume dealers. Are you getting hit with dealer prep, destination fees, or a warranty extension?

      0% is still a sweet deal regardless... you're going to pay the little tack on fees regardless of the APR.
      ALL DEALERS ARE EVIL !!!!

      The dealer still gets a few bucks from the financing arm for originating the loan, usually $100.

      The dealers I worked at didn't try to add anything extra on to cars that had a 0% promotion on them. In many cases 0% meant that they were hard to move models in the first place and we didn't strive to make it harder.

      You're going to get a hard sell about extended warranties every single time, no matter how you pay for a car.

    13. Banned
      Join Date
      Sep 25th, 2009
      Location
      Copperhead Road, TN
      Posts
      3,816
      Vehicles
      BIG BLOCK DODGE
      12-30-2010 03:24 PM #13
      Quote Originally Posted by ...rohit View Post
      ahh now I understand, I thought it was in addition to the repayments, thanks guys!
      i read it like that, too. don't feel bad.

      here in canada 0.0% offers on new cars are quite common and have been for many years. the difference is that we pay more for cars to begin with, so there's more room for them to market financing at lower interest rates, and yes, they are legitimately 0.0% interest. i bought my car at 0.9% interest 3 years ago, but paid $17,995+ tax = $21k OTD for my hyundai accent sport hatchback.

      if you're getting american retail prices AND 0.0%, now that's a deal!

    Posting Permissions

    • You may not post new threads
    • You may not post replies
    • You may not post attachments
    • You may not edit your posts
    •