0% Financing?
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Junior User
Joined: Sep 2014
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From: Palm Beach Gardens, FL
0% Financing?
Can someone explain Ford's logic behind their 60 or 72 month 0% financing? They require an addition $1,000 down, which is fine, just lowers the loan amount. Why would anyone choose Ford's 1.9% or 4.9% or another vendors financing options, like a 48 month 3% deal.
Senior User
Joined: Dec 2006
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At one time Ford offered the choice of either "0% financing" or "$4,000 cash back". If you took the "cash back", it stuck you with higher interest terms. In short, they charge you a higher purchase price for the "free financing" deal. Either way, they are going to get their money.
You can get very low interest auto loans online with reputable banks and some insurance companies are giving great loan terms now. I think it's best to get pre approved then walk into the dealership and tell them you are writing a check and you want their best deal they can offer you, instead of the usual salesman pitch, "watcha want your payment to be" garbage then get eaten alive at the F&I department.
Rates are so low now I wouldn't worry about "rate shopping". 1/2 point difference will not change your payment hardly at all. Get pre-approved then go for the best "out-the-door-price".
Have fun!
You can get very low interest auto loans online with reputable banks and some insurance companies are giving great loan terms now. I think it's best to get pre approved then walk into the dealership and tell them you are writing a check and you want their best deal they can offer you, instead of the usual salesman pitch, "watcha want your payment to be" garbage then get eaten alive at the F&I department.
Rates are so low now I wouldn't worry about "rate shopping". 1/2 point difference will not change your payment hardly at all. Get pre-approved then go for the best "out-the-door-price".
Have fun!
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Junior User
Joined: Sep 2014
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From: Palm Beach Gardens, FL
It's all coming back to me:
$4,000 off sticker if I choose to get raped and take the 4.9% rate, $1,500 off sticker if I take the 1.9% rate and zero off sticker if I get financing on my own. This I don't remember but I'm guessing Zero off sticker if I choose Ford 0% rate for 60 months ($1,000 deposit) or Zero off sticker if I choose Ford 0% rate for 72 months ($2,000 deposit).
I love it into the snake pit with car salesman! I am waiting for the 15's to come out, I wonder what they will offer then?
l will do as you suggested though go in with my own deal approved from a legit lender.
$4,000 off sticker if I choose to get raped and take the 4.9% rate, $1,500 off sticker if I take the 1.9% rate and zero off sticker if I get financing on my own. This I don't remember but I'm guessing Zero off sticker if I choose Ford 0% rate for 60 months ($1,000 deposit) or Zero off sticker if I choose Ford 0% rate for 72 months ($2,000 deposit).
I love it into the snake pit with car salesman! I am waiting for the 15's to come out, I wonder what they will offer then?
l will do as you suggested though go in with my own deal approved from a legit lender.
Post Fiend
Joined: Apr 2002
Posts: 19,311
Likes: 97
From: Waterloo, Iowa
Six years is WAY too long for a vehicle loan. Take the cost of the vehicle and divide by 36 months - if the payment is too rich - If you can't pay it off in three years, it's too much truck. It's OK to be poor, but ya don't have to stay that way! Five or six year car loans are a good way to do that.
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Junior User
Joined: Sep 2014
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From: Palm Beach Gardens, FL
The thought process that got me to my original post is this:
$40,000 loan with a bank for 4 years at 3% $885.37
or
$39,000 loan with Ford for 5 years at 0% $650.00
Now why should I pay $2,500 in interest to a bank (over those 4 years) when Ford is offering me a lower payment with no interest. Unless of course like JBHFord said they raise the price of the vehicle ($2,500 or more )to me if I take their no interest option
$40,000 loan with a bank for 4 years at 3% $885.37
or
$39,000 loan with Ford for 5 years at 0% $650.00
Now why should I pay $2,500 in interest to a bank (over those 4 years) when Ford is offering me a lower payment with no interest. Unless of course like JBHFord said they raise the price of the vehicle ($2,500 or more )to me if I take their no interest option
Lead Driver
Joined: Apr 2002
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From: Tampa Bay, FL USA
1) The interest rate that Ford Credit offers has nothing to do with the purchase price of the truck. If a dealer is telling you that you have to pay full sticker in order to get 0% FMCC financing, then leave that dealership immediately. They're lying to you and should not be trusted.
2) 999 times out of 1,000, you'll have to give up a significant cash rebate in order to get 0% financing. Let's do the numbers on a $25,000 vehicle:
- $25,000 less $3,000 rebate, $22,000 financed for 60 months @ 2.9% (a pretty standard rate today for someone with decent credit) = $394.33 per month
- $25,000 for 60 months at 0% = $416.67 per month
Not matter how you figure it, 0% is almost always a bad deal for the consumer. If for some reason there's no rebate and the manufacturer is offering a rate below market (Honda has been doing this for years, as they've never offered a cash rebate on their vehicles, just low interest rate or special lease deals), then grab it. But you MUST look at the numbers both ways (as I've shown in the above example) before deciding on financing.
2) 999 times out of 1,000, you'll have to give up a significant cash rebate in order to get 0% financing. Let's do the numbers on a $25,000 vehicle:
- $25,000 less $3,000 rebate, $22,000 financed for 60 months @ 2.9% (a pretty standard rate today for someone with decent credit) = $394.33 per month
- $25,000 for 60 months at 0% = $416.67 per month
Not matter how you figure it, 0% is almost always a bad deal for the consumer. If for some reason there's no rebate and the manufacturer is offering a rate below market (Honda has been doing this for years, as they've never offered a cash rebate on their vehicles, just low interest rate or special lease deals), then grab it. But you MUST look at the numbers both ways (as I've shown in the above example) before deciding on financing.
Super Moderator
Joined: Jan 2008
Posts: 40,039
Likes: 1,523
From: Maine, Virginia
1) The interest rate that Ford Credit offers has nothing to do with the purchase price of the truck. If a dealer is telling you that you have to pay full sticker in order to get 0% FMCC financing, then leave that dealership immediately. They're lying to you and should not be trusted.
2) 999 times out of 1,000, you'll have to give up a significant cash rebate in order to get 0% financing. Let's do the numbers on a $25,000 vehicle:
- $25,000 less $3,000 rebate, $22,000 financed for 60 months @ 2.9% (a pretty standard rate today for someone with decent credit) = $394.33 per month
- $25,000 for 60 months at 0% = $416.67 per month
Not matter how you figure it, 0% is almost always a bad deal for the consumer. If for some reason there's no rebate and the manufacturer is offering a rate below market (Honda has been doing this for years, as they've never offered a cash rebate on their vehicles, just low interest rate or special lease deals), then grab it. But you MUST look at the numbers both ways (as I've shown in the above example) before deciding on financing.
2) 999 times out of 1,000, you'll have to give up a significant cash rebate in order to get 0% financing. Let's do the numbers on a $25,000 vehicle:
- $25,000 less $3,000 rebate, $22,000 financed for 60 months @ 2.9% (a pretty standard rate today for someone with decent credit) = $394.33 per month
- $25,000 for 60 months at 0% = $416.67 per month
Not matter how you figure it, 0% is almost always a bad deal for the consumer. If for some reason there's no rebate and the manufacturer is offering a rate below market (Honda has been doing this for years, as they've never offered a cash rebate on their vehicles, just low interest rate or special lease deals), then grab it. But you MUST look at the numbers both ways (as I've shown in the above example) before deciding on financing.
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