Quote:Yes it is.

 

First of all, look realistically rather than "wishful thinking".  No car dealer/bank/credit union is going to offer a loan for 60 months at 0% financing.  They might offer that at the beginning of a loan, but eventually they are going to charge interest.  That's how they make money.

 

Second of all, say you take a "0%" loan over 60 months.  We'll just say that your payment is $300.  Is it better to pay your $300 towards a car loan, or is it better to put that $300 in the bank in say a money market account that is earning say 1%?  Over 60 months that adds up.

 

Money in the bank, even if it's in a low interest rate earning account is better than paying the same amount where it virtually "disappears".

 

People constantly get sucked into the "no interest for 6 months" deal on credit cards as well as the "low interest rate" on new cars.  The "zero dollar down" mortgages are the worst.  We've become a consumer based society where it's far too "easy" to get supposedly "free" cash.

 

The bottom line is, if you can't put down at least 10% of the purchase price in cash for anything, you can't afford it and you don't need to be financing it.

I sold Kubota tractors for years with 0% down, 0% interest loans. What they lacked in loan profit they sure as heck made up for in market share.


In your payment example you're spending a total of $18,000 dollars. If you have $18,000 cash to buy said car with and are offered a 0% loan, you should take the loan. The $18,000 will gain more interest in the bank account over the 5 year period than accruing $300 a month over the same period would.

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