I ask because the 0% financing thing is attractive to me and might cause me to go buy a car.
However, in the past I have seen 1% or 2% deals from various manufacturers but have never met a single person who could actually get that rate. It seems you need to have Bill Gates credit record and resources before they will float you a loan at those rates.
My wife and I have a perfect credit rating. Not a single blemish on our credit reports (mine used to be pretty bad but I’ve worked hard for the last 10 years to clean it up so it’s all behind me now). On our last car purchase the best rate they would give us was 7.5% and that was after they originally offered 12% and we almost walked out of the dealership.
Does anyone know what it takes for these loans or if GM is being more lax in its requirements this time around? I don’t want to waste my time visiting dealerships if I can’t get those rates (and don’t tell me to call a dealership and ask because they will tell you what you want to hear just to get you in…I know this from personal experience).
They’ll probably give you 0% interest if you give up on other things, like a low price. The typical pattern is to find out what the customer is focused on (some people are worried about interest rate, some about price, some about exact model and options, etc.), give that to them, then sock it to 'em everywhere else.
I’ve found it’s best to get a loan from a credit union, to eliminate it from the “negotiations” at the dealership.
I’m sure there are plenty of restrictions on the rate, but go ahead and look into it.
A couple of years ago, my wife and I bought a Dodge car with a 0% APR. The restrictions were a maximum of $20,000 financed and a maximum term of 24 months. So, our down payment was the difference between the price of the car and $20K, and we paid some $833/month for the next two years. I put $20K into a money-market fund and earned a few points worth of interest over the term…came out ahead on the deal. For what it’s worth, I didn’t have to sacrifice on the price, either.
If you can meet the restrictions on the lower rates, go for it.
Out here in Seattle, Ford is offering 0% for 60 months and $1000 off your best negotiated price. I spoke with a fleet salesman. He said he would quote a price a few hundred above list, no negotiating. It’s easy enough to check kbb.com for list prices, so he can’t bullshit there. Then that price would drop by $1000, and I’d get 0% for 60 months. That part’s from Ford Credit, not the local dealer.
This, of course, is only on 2001 models. They’ve got a bunch of 2001’s on the lot, and they need to dump them before the 2002’s arrive.
Sounds like a good deal to me. I’m looking at a Focus hatchback. My credit’s great, so I never thought about not qualifying for the 0%. I hope I can get it.
These “super-low-financing” deals often have a catch as mentioned, i.e., low number of months or maximum borrowed amount. But even with this, you have to be a good credit risk. This doesn’t mean you have to have “Bill Gates” credit, but you can’t have a history of late payments, unpaid student loans, and so on. It also means you have to have a HISTORY of credit, i.e., not just a single Hudson’s department store credit card, for example.
I think Ford is currently offering 0% for up to 3 years, and as little as 2.9% for up to 5 years! That’s a GREAT credit deal. Only good until 31-Oct, though.
None of the auto manufacturers are out to screw you right now; we’re desperate to start selling again. Thus, the incentives such as financing and cash-back are designed to keep the books black.
BE PATRIOTIC! Buy an American car now (and if you really want a foreign-name, wait until your next car).
As for “dealer financing” DON’T DO IT! But this doesn’t mean you can’t use GMAC or Ford Credit. You can deal with them directly BEFORE you so shopping. They’ll approve you and get you your interest rate BEFORE the dealer has a chance to tack on a “commission percentage.” They’ll ususually give you an “approval number” and you only need to be insistent that the dealer uses it instead of running their own credit check. DON’T let them run their own credit check; you’ve already got your financing, and they DON’T need it despite how they plead. I’ve done this for both my Pontiac (GMAC) and my Ford (Ford Credit) over the internet, and it made it a BREEZE at the dealer. Oh yeah, they dealer will still do the paperwork!
FWIW, if you’re looking for a Honda, I used to have one financed by GMAC! So, you could help out Ford or GM by at least FINANCING through one of them!