# What's the other side of 0% auto financing? **URL:** \ **Category:** Factual Questions\ **Created:** [March 7, 2010, 4:19pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629 "2010-03-07T16:19:18Z")\ **Posts on this page:** 13\ **Page:** 2
**Author:** ![Anachronism](https://avatars.discourse-cdn.com/v4/letter/a/e56c9b/32.png) [@Anachronism](https://boards.straightdope.com/u/Anachronism)\ **Post date:** [March 8, 2010, 5:56am UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/21 "2010-03-08T05:56:46Z")
> [@dre2xl](#): > > Eh? Lowest deprecation I could find was 5% on Honda Accord, assuming excellent condition & not driven. Any deviation and it was 10%. If you meant that there are some used cars that are worth nearly as much as their new counterpart – yes, I’ll grant that is true – but it’s not the rule. 2009 Ford Focus, excellent condition and 10K miles, $12,205; 2010 Ford Focus, new, $17,895.00. That’s jaw-dropping. YMMV. Sorry for continuing the hijack but a 2010 focus SES also has a $3000 incentive and goes out the door for just over invoice, out the door price ~$15,600. A 2009 focus ses goes for about $14,000. To me, Jaw dropping that somebody wouldn’t pay the extra $1,600 for a brand new car. All prices according to [edmunds.com](http://edmunds.com) [http://www.edmunds.com/new/2010/ford/focus/101169830/optionsresults.html?action=2](http://www.edmunds.com/new/2010/ford/focus/101169830/optionsresults.html?action=2) ---
**Author:** ![muttrox](https://avatars.discourse-cdn.com/v4/letter/m/a8b319/32.png) [@muttrox](https://boards.straightdope.com/u/muttrox)\ **Post date:** [March 9, 2010, 4:23pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/22 "2010-03-09T16:23:06Z")
> [@Todderbob](#): > > If you want the best possible price on a car, your first step is emailing **every single local dealership of that brand** and say the following, quite simply. > > I’m in the market for a new XXX vehicle. I want YYY feature package. Quote me your best price. Include all possible incentives, whether to the dealer or to the customer. I’d like an out the door cost, so include Documentation, Licensing and Title fees. I have no need for any additions to the car, I’d like it as it comes from the factory, with no after market equipment. > > If your price is suitable, I will be in for delivery within the next 48 hours. > > Use that as your email… I second this method. I read it on the SDMB somewhere (maybe it was Duckster?) and [copied it to great success.](http://www.muttrox.com/index.php/2007/09/finally/) > [@](#): > > I would like to buy a new 2007 Toyota Sienna. I am looking for a Sienna LE, base model (no options package), 8-seat version. Tan or silver is preferred, other light colors are acceptable. > > ``` > What is your best price for a car with these specifications? The price should be a final drive-out price (so it would include the $1500 rebate, taxes, etc). There is no trade-in or financing involved with this transaction. > > I will write exactly one check. If I come in and the final amount is different than your quote by even one penny, I will walk out of your dealership forever. > > Please note, I am ready and willing to close this transaction this weekend. I am writing this same message to several dealerships. Whoever has the best price will get my business. > > Thank you, > bla bla bla > > ``` ---
**Author:** ![Lanzy](https://avatars.discourse-cdn.com/v4/letter/l/74df32/32.png) [@Lanzy](https://boards.straightdope.com/u/Lanzy)\ **Post date:** [March 9, 2010, 4:40pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/23 "2010-03-09T16:40:57Z")
Just read the deal carefully and negotiate as if your life depends on it. I got $7500 off a new Tiburon (after incentives, sale price, returning customer, etc.), + 0% financing. Financed price was 14500 with a car with all the extras. ---
**Author:** ![Czarcasm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/czarcasm/32/4050_2.png) [@Czarcasm](https://boards.straightdope.com/u/Czarcasm)\ **Post date:** [March 9, 2010, 4:53pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/24 "2010-03-09T16:53:15Z")
The deal is usually 0% _oac_(on approved credit)-what credit rating would that be, and what percentage of people going for that deal can get it? ---
**Author:** ![AClockworkMelon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aclockworkmelon/32/10803_2.png) [@AClockworkMelon](https://boards.straightdope.com/u/AClockworkMelon)\ **Post date:** [March 9, 2010, 4:56pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/25 "2010-03-09T16:56:02Z")
Perhaps Toyota isn’t the company you should be considering buying a vehicle from. Just saying. ---
**Author:** ![Todderbob](https://avatars.discourse-cdn.com/v4/letter/t/e47774/32.png) [@Todderbob](https://boards.straightdope.com/u/Todderbob)\ **Post date:** [March 9, 2010, 5:27pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/26 "2010-03-09T17:27:30Z")
> [@Lanzy](#): > > Just read the deal carefully and negotiate as if your life depends on it. > > I got $7500 off a new Tiburon (after incentives, sale price, returning customer, etc.), + 0% financing. Financed price was 14500 with a car with all the extras. You’re not likely to get that kind of money off of a Tier 1 import, but you’ll usually get invoice if you negotiate properly. Hyundai and Kia (I own a Kia, and love it) are more or less identical vehicles with a few exceptions, and they usually have big-giant rebates, incentives, etc. > [@Czarcasm](#): > > The deal is usually 0% _oac_(on approved credit)-what credit rating would that be, and what percentage of people going for that deal can get it? That depends, I can’t give you a score, because there are criteria that have to be met or can disqualify you. The higher your score, the more likely you’ll get approved, of course. But recent repo’s, etc will get you denied even with a relatively high score. On the other hand, if you go to a dealership with some pull with Honda Credit/Toyota Credit /Ford Credit/GMAC you’ll get approved with a lower score. How do you know if a dealership has a good relationship with their factory loan department? You don’t. How do you know if they’ll go to bat and rehash on your deal or rehash to get you a bump in tier (which can save you money and/or make them more profit)? You don’t. Sorry. > [@AClockworkMelon](#): > > Perhaps Toyota isn’t the company you should be considering buying a vehicle from. Just saying. There’s nothing wrong with Toyota. Sure, their current recall is slightly jarring from a consumer perspective, but it’ll blow over. If you’re prepared (as in, read about the potential hazards) and get your safety recalls done, you’ll (probably :p) be fine. ---
**Author:** ![Czarcasm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/czarcasm/32/4050_2.png) [@Czarcasm](https://boards.straightdope.com/u/Czarcasm)\ **Post date:** [March 9, 2010, 5:45pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/27 "2010-03-09T17:45:26Z")
> [@Todderbob](#): > > That depends, I can’t give you a score, because there are criteria that have to be met or can disqualify you. > > The higher your score, the more likely you’ll get approved, of course. But recent repo’s, etc will get you denied even with a relatively high score. On the other hand, if you go to a dealership with some pull with Honda Credit/Toyota Credit /Ford Credit/GMAC you’ll get approved with a lower score. > > How do you know if a dealership has a good relationship with their factory loan department? You don’t. Is it possible to find out if you qualify early on in the game, or do you have to wait for the “Okey dokey-I’m 99.99% sure we can make this deal! I’m just going to go and get this signed off by my manager(whom I never mentioned at all in the previous 45 minutes I pretended I had the authority to make this deal), so you just sit here in this stark room and I’ll be right back in a jiffy!” stage to find out? ---
**Author:** ![Todderbob](https://avatars.discourse-cdn.com/v4/letter/t/e47774/32.png) [@Todderbob](https://boards.straightdope.com/u/Todderbob)\ **Post date:** [March 9, 2010, 6:48pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/28 "2010-03-09T18:48:53Z")
> [@Czarcasm](#): > > Is it possible to find out if you qualify early on in the game, or do you have to wait for the “Okey dokey-I’m 99.99% sure we can make this deal! I’m just going to go and get this signed off by my manager(whom I never mentioned at all in the previous 45 minutes I pretended I had the authority to make this deal), so you just sit here in this stark room and I’ll be right back in a jiffy!” > stage to find out? Theoretically, yes. They can submit your name into a program called [Dealertrack](https://www.dealertrack.com/), which gives tentative Approved/Declined (and what stips would be required) for an individual. Depending on the program they’re on, this can cost them per individual submitted, so they may not want to give you that. In the best run dealerships, before you ever set your eyes on a car the manager knows exactly what he can get you done for (up to X% of Y Value cars, G% of Z value cars, etc), and you don’t choose your car, he and the salesman select the cars that you can get financed on, based on the down payment they can get out of you and the payments they think you’ll get approved on, and let you choose from them (no reason to show you a beamer, if you’re only financeable on a civic). However, I’ve been in plenty of dealerships that have tagged cars for the road (NC, never – in NC once it has a temp tag the customer owns the car, so they D-tag the cars until approval) before the paperwork was submitted, much less approved. If you’re buying a used car, my first recommendation is not to go with the dealerships financing off the bat. Go to your local banks and credit union and ask them what their current rates are. Keep this in your hand (or head) before you to go the dealership. You don’t **have** to buy into dealership financing, despite what they tell you. If you’re buying a new car – same deal, except you should also research the promotional rates of the manufacturer you’re purchasing. ---
**Author:** ![Hampshire](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hampshire/32/4887_2.png) [@Hampshire](https://boards.straightdope.com/u/Hampshire)\ **Post date:** [March 9, 2010, 8:10pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/29 "2010-03-09T20:10:02Z")
**What’s the other side of 0% financing?** 0% financing is offered as a manufacturer incentive. Not a dealer incentive. The same thing as manufacturer rebates. You negotiate with the dealer your price down to their invoice cost. Then the manufacturer incentive is subtracted from that. So what’s the other side to 0% financing? The fact that they don’t offer rebates at the same time they offer the 0% financing. They’re typically running one or the other (or neither). As far as using cash as a negotiating tool? The dealers couldn’t care less. If you finance through your bank, their bank, whomevers bank they’re still getting their money in full when the deal closes. In fact they may even prefer to have you finance through them. They probably get some kind of kick-back from their banks for getting them a new customer. ---
**Author:** ![Todderbob](https://avatars.discourse-cdn.com/v4/letter/t/e47774/32.png) [@Todderbob](https://boards.straightdope.com/u/Todderbob)\ **Post date:** [March 9, 2010, 8:57pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/30 "2010-03-09T20:57:48Z")
> [@Hampshire](#): > > They probably get some kind of kick-back from their banks for getting them a new customer. Dealerships can make into the thousands of dollars on the back end. It’s not a kick back, it’s upselling product to raise the payment (life insurance, disability, GAP, etc) and making the difference on points. ---
**Author:** ![The\_Lurker\_Above](https://avatars.discourse-cdn.com/v4/letter/t/dc4da7/32.png) [@The\_Lurker\_Above](https://boards.straightdope.com/u/The_Lurker_Above)\ **Post date:** [March 9, 2010, 9:50pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/31 "2010-03-09T21:50:23Z")
> [@Hampshire](#): > > As far as using cash as a negotiating tool? The dealers couldn’t care less. If you finance through your bank, their bank, whomevers bank they’re still getting their money in full when the deal closes. In fact they may even prefer to have you finance through them. They probably get some kind of kick-back from their banks for getting them a new customer. I for one was surprised when buying my first car (Toyota Matrix) back in Oct. that after negotiating the final price the dealer was happy to offer 3 year 0% financing, and completely uninterested in cash + discount. 0% financing is obviously costing _someone_ money; but not the dealership in my case. ---
**Author:** ![Todderbob](https://avatars.discourse-cdn.com/v4/letter/t/e47774/32.png) [@Todderbob](https://boards.straightdope.com/u/Todderbob)\ **Post date:** [March 9, 2010, 9:55pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/32 "2010-03-09T21:55:26Z")
> [@The\_Lurker\_Above](#): > > 0% financing is obviously costing _someone_ money; but not the dealership in my case. It’s not costing the factory as much money as you’d think. It’s more beneficial to the factory to sell those extra cars to the few who do qualify for the 0%, and offer the program universally to draw people into the dealerships, than it would be to invest that money or pay it out in dividends. ---
**Author:** ![Fridgemagnet](https://avatars.discourse-cdn.com/v4/letter/f/22d042/32.png) [@Fridgemagnet](https://boards.straightdope.com/u/Fridgemagnet)\ **Post date:** [March 9, 2010, 10:21pm UTC](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629/33 "2010-03-09T22:21:02Z")
Buy a big top-of-the-range Citroen if you want some _real_ depreciation. The old XM, and now the new C6, will lose about 50% of their value in the first year (c. 10,000 miles on the clock), at least in the UK where we are fearful of their French wizardry. But the dealers will offer all sorts of incentives to sell you one, especially cashback deals. They make up for this by having poor after-sales service and expensive spares. [Previous page](https://boards.straightdope.com/t/whats-the-other-side-of-0-auto-financing/531629.md?page=1)