No, that’s just them being assholes to maintain a prestigeous image, and you (and lots of others) falling for that crap. They tried that B.S. on my twice when shopping for Hondas – once in Augusta, Georgia, and again in Killeen, Texas. You also want to examine everything they try to charge you for in their closing contract. Here’s the list of best selling cars by volume in 2006. The Honda Civic’s only 6th on the list. If exclusivity weren’t completely artificial, you’d be paying full price for a Camry.
[ol]
[li]Ford F-Series 796,039 [/li][li]Chevrolet Silverado 636,069 [/li][li]Toyota Camry 448,445 [/li][li]Dodge Ram 364,177 [/li][li]Honda Accord 354,441 [/li][li]Honda Civic 316,638 [/li][li]Chevrolet Impala 289,868 [/li][li]Toyota Corolla 272,327 [/li][li]Nissan Altima 232,457 [/li][li]Chevrolet Cobalt 211,449 [/li][/ol]
Honestly, I’m not trying to pick on the Civic. I’ve owned two of them (and certainly didn’t get taken for a sucker, but got the sucker pitch).
For the fun of it, when I see commercials advertising 0.0% I’ll pause it via the magic of DVR and examine the small print. What I’ve noticed is that the loan term tends to be shorter than you might get normally, and so although you’re not paying interest, you’re still paying far more per month than you might on a longer term with reasonable interest. If the per-month cost isn’t that important or you can afford $700 a month, great, but when that same car can be financed for $400 a month if the term is a year or two longer, it doesn’t sound like such a hot deal to me.
That’s just the list price, you can probably get them down to 7.5 bil, if you make them bargain you up from 7 bil instead of trying to bargain them down from 8 bil.
Let’s see… being a modern, smart consumer, my online research indicates that Ford acquires their Volvos at the tune of $6.45 billion each, in which case allowing a fair profit to Ford (say, $1,000), we should start our bargaining position at $6,450,001,000 and negotiate up from there.
Yes, but don’t bring up your trade until you reach an agreement on the price for the car company.
Don’t agree at all. And maybe it’s regional. Everyone but everyone was buying Civics in the area where we lived. We visited a few lots and couldn’t get the dealers to budge much at all. Some, sure, as I’ve noted above, because they know you expect it, and they have to give you something, but not much. They simply didn’t have to budge, because there was someone standing right behind you waiting, and the dealer didn’t have unlimited inventory.
That said, I’m certainly no car guy. If I was, I probably would’ve researched the hell out of it, and visited dozens of lots to find a dealer where business was slow, or where they needed to move a few extra units for whatever reason.
Be wary of this reasoning, since car salesmen will often try to sell you on the monthly payment, rather than the actual cost. If you make the loan long enough, you can make the monthly payment look nice and low, even with the interest rate and price jacked up.
$700/mo for 2 years at 0% is way better than $400/mo for 5 years at, say, 13% (making numbers up without doing the math. Please don’t yell). If you can afford the payment for a short loan with no interest, you’re much better off. If you can’t, perhaps you should consider a cheaper car, rather than a higher interest rate.
Of course I’m not the OP, and I’ve never even purchased a new car, let alone cared about cars all that much, but I do what to thank you for that link. It was very interesting from a psychological standpoint. Nice find!
ETA: for anyone who hasn’t read it, Edmunds sent a journalist who’s never sold cars before undercover as a salesman at a couple of different dealerships - one high-pressure Japanese place, and one low-pressure American dealership. It made for a fascinating behind-the-scenes report, IMHO.
Being 6th on this list is very high. Remember that these are mostly franchise stores, for a Honda dealer, it’s his top seller. He may be competing with the Camry, but not the Silverado, Ram, or Ford.
Some real numbers to consider:
A $25,000 car loan.
0% interest, 2 years = $1,041 per month (ouch!)
0% interest, 3 years = $694 per month
8% interest, 2 years = $1130 per month
8% interest, 3 years = $783 per month
A more realistic scenario:
8% interest, 5 years = $506 per month.
I could almost see going for 0% for 3 years but that’s still a very hefty payment. Even $506 is still a lot, which is why I stick with used cars.