Any finance people here?

[WayCoolJr]

Going to be buying my Stinger GT2 in about a month and can't figure out what is better for me...the 0% financing or the cash. Here is my situation:
I plan to put about $20K down on the car and pay it off in 2 years. I also plan to get a 5 year loan, "just in case" I need the cash, but I don't for see that happening.

Should I take the extra $2750 cash and put that toward the price of the car, or take the financing a 0%. Which is the better deal?

 

[runner1]

It makes less than Zero sense to borrow against a bank for a loan to sit as security for a car when you have zero finance as an option. You borrow ONLY when needed. It makes less than no sense to pay a bank to borrow. Keep the 20 grand and invest at 2-3 percent for five years and make a profit on the 0 percent money.

 

[WayCoolJr]

It makes less than Zero sense to borrow against a bank for a loan to sit as security for a car when you have zero finance as an option. You borrow ONLY when needed. It makes less than no sense to pay a bank to borrow. Keep the 20 grand and invest at 2-3 percent for five years and make a profit on the 0 percent money.

I forgot to mention I am retiring in 3 years and want the car paid off before I retire.

 

[Schumi Jr]

It makes less than Zero sense to borrow against a bank for a loan to sit as security for a car when you have zero finance as an option. You borrow ONLY when needed. It makes less than no sense to pay a bank to borrow. Keep the 20 grand and invest at 2-3 percent for five years and make a profit on the 0 percent money.

I agree with the summary above. There is quite a bit more to the conversation, but in general the concept is accurate.

 

[Schumi Jr]

I agree with the summary above. There is quite a bit more to the conversation, but in general the concept is accurate.

I should add that there are calculators online that can show you the difference in payments, total paid, interest paid, etc. I use this one often:

https://www.cars.com/car-loan-calculator/

 

[Schumi Jr]

This may help to: Car Payment Calculator

Lets assume you want to pay in three years. There are literally infinite scenarios in how much down etc. Below I put two examples one where there is nothing down at 0 percent for 3 years. Nothing down as it makes no sense to have a down payment on 0 percent interest. Without getting into it, the time value of money...just don't.

The other scenario is at a nominal interest rate assuming you have decent credit paying off the car in 3 years using the rebate as part of the downpayment. It is unlikely you will earn 3.99% (the loan apr) on any low risk investment as a CD, so it makes sense to put a down payment.

Hope this helps.

EDIT: I should say you can see its essentially a wash. These companies know what they are doing with these offers.

 

[MisterMac]

Take the $2,750 additional incentive now and finance the balance after your downpayment through a credit union with the lowest possible rate. Then pay off the loan as fast as possible and you will be dollars ahead.