There’s no doubt 0% car financing is a good option to purchase a new car if you qualify. However, there may be even more savings on that vehicle if your willing to crunch the numbers and do your homework! Let’s look at how
Hey guys it’s greg and welcome back to seven woods today we’re gonna be talking about the ever so popular zero percent financing on new vehicles is it worth it is it not is it a scam well that’s what we’re going to be looking at today we’re going to be going over some pros with the zero percent financing option as well as some cons that we could be looking at as
Well so first we need to be talking about some of the pros so zero percent financing has been around for a while essentially what it is is the automaker themselves are financing the loan so when the auto maker finances the loan they know exactly what is going to be paid so the advantage to them is that the vehicle itself is still going to be financed and they’re
Still going to get the same amount of money no matter what so that’s not going to change so looking at one of the first pros we could be dealing with is the fact that zero percent is essentially what it is it’s a free loan when you have a free loan you don’t have any interest to pay so there’s definitely some advantages with that you don’t have any interest to
Pay the bank’s not going to get in this case the automaker doesn’t get anything from financing but the key there is there’s other ways that they’re going to get the money obviously they’re not just going to offer a zero percent financial finance option without them getting something out of that deal so that’s what we need to be looking at as well so another
Advantage to going with the zero percent financing option is the fact that it offers different terms so looking at whether it’s 72 months 60 months 48 or even 36 the different car manufacturers are going to offer the different incentive plans that will cater more to your liking so the one that you really need to be cautious with is the 72 month term the longer
The note is drawn out the more you’re going to be stuck with it and overall depreciation is going to be occurring just like it does with any vehicle so the longer term you have the means the less you’re going to be paying so overall you’re not going to be ahead you could still essentially be upside down in the vehicle for a considerable amount of time so the next
Thing we need to be looking at is the fact that when you do a zero percent finance option on a new vehicle it takes a lot of the headache out of the new bike new car buying process when you’re buying a new car it’s a stressful time a lot of people don’t care to go into the dealerships and try and haggle the dealer down look at different financing options because
Obviously the dealers looking at any which way they can to try and make another dollar off yeah they’re gonna try and do it all the way from financing to the undercoat protection everything else that they’re gonna try and offer you obviously so with zero percent being an option that you qualify for you can just leave it just at that zero percent option they’ll
Give you the price of the vehicle you’re going to finance it for the term that you want and then that takes the rest of the headache out as long as you qualify for the zero percent you’re going to be able to go from there and you can choose whether or not you want to do the 672 all the way down to the 36 month that’s just going to make it that much easier for you
It’s going to be less headache less worry and overall the buying experience will be more greatly improved okay guys now let’s look at the some of the cons of going with the zero percent financing option for purchasing your new vehicle so the zero percent is obviously offered on certain incentive models so it may not be the model you want or care to purchase it
It could make you settle in some cases maybe it’s not offered on the option package that you want on that particular vehicle so with the limited availability of the particular vehicle you may not be able to qualify for the zero percent or just may play not plainly not even be offered which could be a deal breaker for some so another thing that you really need to
Consider when you’re purchasing a zero percent is the fact that when you do zero percent financing on the car loan paying the loan off early does nothing for you when you go and purchase a 36 month zero percent financing option and you go to pay it off early at 24 months or maybe even earlier there’s no incentive for you you’re not saving on any interest money
The the loan is what it is the automaker actually is hoping you’re going to do this because they know they’re going to get the same amount of money whether you go 36 48 60 or even 72 months or even the cases that we have now during the pandemic higher than the 72 month options all the way up to 84. so they want you to pay it off early when it’s paid off early
They’re getting their money sooner rather than later so it just instead of a drawn out process of them getting paid they’re going to get the money more upfront which is really hoping what they’re you’re gonna do so any advantage to the auto maker is really not an advantage for you so again guys zero percent is difficult to qualify for save for the best credit
Scores out there but also look at the other options that might be available to you generally anybody with good to excellent credit is going to have different options on the table so you need to make sure you’re looking at all of them before you finally make your decision one of the next cons that you could be looking at on the zero percent financing has to do
With the incentive deals that are out there so the incentive deals are what the automaker offers to boost the sales themselves summertime is usually a good point during the year when automakers are trying to cut loose the current year’s models they need to start making room for the new inventory of the following year that’s coming up so once the new car starts
Showing up dealers got to start making some changes on their lots and and having some extra room so generally summertime late summer early fall time frame is when some of the best incentives actually occurred so based on that you need to be looking at what incentives are actually out there some of the incentives may have certain rebate packages available that
You need to weigh the both the total rebate that could be offered for a particular vehicle as opposed to the zero percent in some cases on say a thirty thousand dollar car with a thousand dollar rebate you know you’re going to lower the price of the vehicle by a thousand dollars and maybe you could even negotiate a little bit further with the dealer themselves
Depending on how much room they have with that particular model but maybe a thousand dollar rebate still doesn’t quite justify the uh going against the zero percent financing when you run the numbers overall during the length of the term zero percent could could be still the way to go but the other option is maybe there’s more than a thousand dollar rebate maybe
There’s a bunch of different incentives that you can stack onto to the current incentives to make it even more enticing so when you start running the numbers on that that’s when you start seeing advantages to the rebates over the zero percent financing option when you have stacked rebate deals if you start running the numbers generally you’re going to see some
Better pricing options so don’t always just default to the zero percent think it’s going to be the best thing generally you’re if you qualify for zero percent you’re going to have good credit you’re going to be able to go your credit union your local bank or even another uh loan program offered by the dealers themselves and from there you’re going to be generally
Looking at a very low interest rate to begin with so with the low interest rate on top of all the rebates when you calculate out to say a 60 month term with 20 percent put down you could be looking at an overall less pay for the vehicle when you look at your out the door price from your zero percent as opposed to the 60 month finance term that you just negotiated
Yourself a lot of people at this point don’t want to deal with it as you can tell just by going on the internet and quick searches there’s a lot of internet buying car buying companies out there that are doing very well just because people don’t like going in with the hassle with the dealerships so but the thing is when you go in into a dealership and you just
Kind of let them run the show generally they’re going to be coming out much more ahead than you are so if you want to do your homework you want to research the vehicle themselves go to a few different dealerships that’s what that’s what you need to be doing to make sure that you are not going to be taken for a ride from one of these dealers all right guys i got
Two scenarios here we’re looking at a car payment calculator for a car that’s per price of 25 000 in each case one being a rebate option the other being just the zero percent option as you take a look at the two here the zero percent on a 60 month term ends up being a payment of 416.67 obviously no interest paid since it’s a zero percent loan and then you’re
Going to end up the total amount of 25 000 in the end now looking at the other option a twenty five thousand dollar loan with a four percent interest rate looking at a three thousand dollar rebate option for the sixty month term you’re looking at a monthly payment of four hundred and five dollars and sixteen cents and you’ll have a total interest paid of 2
300 960 for a total amount paid of 24 309 60 over the life of the loan so looking at the two scenarios in this particular case the zero percent is not the best option you always need to run the numbers do the math make sure you know what you’re looking at because in cases like this where rebate option is available that’s what you need to be looking at and that’s
What’s going to save you money okay guys so we just got done looking at the pros and cons of purchasing a car with the zero percent financing options so remember looking to do your own homework will get you the best rate possible whether you’re looking at the zero percent option or you’re trying to negotiate a better deal for yourself if you want to put the time
In start doing your own homework research in the car you want to buy and go into several different dealerships once you’re done with that whole process you’ll feel good about the the deal you finally worked out when you did do purchase the car and overall the buying experience could take a little bit longer but in the end you’re going to save some money and that’s
What it’s all about right so overall zero percent financing is definitely a decent option i’m not going to say that it is not it allows the flexibility of purchasing a vehicle under the terms that you want and for the time frame you want to do it if you want to take the time negotiate a better deal it’s something you should definitely look at if you don’t want
The hassle of that and you just want to walk in uh find the vehicle you want go with the zero percent term you qualify for overall i think the buying steering experience will still be pretty decent for you so that’s all we got for today guys i really appreciate you guys tuning in please hit the like button please subscribe to my channel we’re going to do these
Every week we’re going to be talking about different financing ideas for anything from vehicles other big purchases uh real estate portfolio diversification it’s going to be different subject matter all the time please hit the like button subscribe to my channel and i’ll see you next time
Transcribed from video
How to get a better deal than 0% financing on your car! By 7Wood’s
