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MalabarJag · 04-09-2016, 08:34 PM

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.

A zero percent loan stays zero percent, at least as long as you don't miss a payment. In your example the money spent on a car could instead be invested. At the end of the loan period you come out ahead by doing it that way.

There's a big HOWEVER here. The reason the dealer can offer a zero percent loan is because they are charging a higher price compared to the price you could get financing it yourself.

Some extra advice. Never ever fall in love with a car. Do the research on what the very lowest price should be for the car, and offer slightly less. Make your offer and be ready to walk off the lot if they won't meet it. I once walked off a lot over a $65 price difference. You'll probably have to walk off a few lots, but eventually you'll get the price you want.

"Why should I give information to you when all you want to do is find something wrong with it?"