The concept in itself is very attractive for a broke bum like me and in dire need of transportation. I was in the market for a Volkswagen Golf but dropped the idea after reading the Consumers Report that came out horrendous 3 years in a row on reliability.
So I turned my attention to these gimics where Mitsubishi and GM and the rest of em are having deals. Whats the inside scoop on 'em if any? Hidden costs?
They wanna sell cars, even if their financial divisions get into losses. The quality of the cars doesn't compare very well (generally) to imported brands so they lure customers in thru sweet financial deals. Typically, great financial offers are available for models which aren't selling very much. But make sure you read consumer reports before jumping to any conclusions.
Yes you dont pay for one year- but you miss off other deals such as for instance $3,000 cash back on a cash purchase of an Oldsmobile Bravada. We recently bought a Venture and recieved a $2,000 discount as we bought on cash. These cash backs only exist on cash purchases. If you opt for financing they will not offer you these deals, but instead you will get 0% financing. Sure 0% is great. But you still loose that $2000 (which make the financing actually 5.7% for an auto costing you $35,000. that 0% sounds worse now doesnt it ;)). So it aint so bad for them. But its sort of bad for you. If you must get that car now, and can afford to loose that $2,000 saving go for it.
But I recommend you sit down with a salesperson you can genuinely trust, and go through your options and see the bottom line. Then take it home and think about it. (If you were in the US, you could
sleep over it ;))
Coco yar, for some people the model, horse power, torque of the car is very important (maybe because they drive on CA highways 
) for other, it’s about money.
Take your pick and then go for the deals. I bought my Honda for 26, now a days I can go in a get the same thing for 22-23. :-/
hskhan... u r assuming that a person has the whole cash payment in the bank account and all he has to do is write a check. Maana ke you are very rich, but not every one can buy a car on full cash payment. So for them 0% financing is tempting. Cashback is only valuable if manufacturer financing is not as tempting as those u get from outside lenders.
As an example, if the manufacturer is only offering 5.9% (48 months) OR a cashback, and you can get your credit union to give you 4.7% (72 months), and you don't have full cash price with you, and you want lowest possible monthly payments, then get your credit union to finance the deal, take benefit of the Cashback offered by the manufacturer (since the manufacturer will get the full price of the car rightaway - partly from your downpayment and remaining from your credit union) and you will end up with better APR and lower monthly payment.
Ofcourse, no outside lender can beat 0% APR, so if you are taking advantage of 0% APR (meaning their lending terms suit your requirement), and you don't have the full cashprice sitting in the bank, then its a no-brainer to go for manufacturer's financing.
I would say financing is way better than leasing - from my personal experience. In Canada lots FIs have very good plans for all sorts of buyers cause all they want is money from you.
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*Originally posted by salman_2you: *
I would say financing is way better than leasing
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There is no better or worse. They are different financial products for different situations. We have discussed this in detail a while ago.
If you don't plan to put a lot of miles, keep the car in good shape, want low down and low monthly outflow and don't want the hassle of selling the car every 3-4 years, then leasing makes sense. Or if you have your own business where you can use the lease payments as business expense.
On the other hand if you drive a lot, want to mod ur car, can afford higher down and more monthly and enjoy driving your "own" car (after a few years) go the financing way.
Typically financing is front-heavy (you pay more upfront) and lease is back-heavy (if you decide to buy the car at the end of the lease). Also typically, for the same down and monthly you can drive a much better car in 'lease' than in 'finance'. Then again, leasing is not for everyone.
Although, if someone goes for financing thinking they can build an "equity" in their cars, they need to seriously work the numbers. Cars lose their value over time, and there is practically no way you can build an "equity" in a car.
Faisal Bhai, never said purchasing on cash was easier or better. ( I myself dont have moolah. It was my mommy who bought the van.). Seems that you like pointing the gun to my head when the slightest oppurtunity arises. From all the responses I was the only person that informed you about downside by going the $0 way."Gimme a break!"
You asked if there were any hidden gimmicks, and I told you one. Yes 0% is low, but its not really 0% if you consider the car will cost you 2,000 more than you purchase it. Yes its not zero, but its very tempting.
Anyway - many people say now is the best time to buy a new automobile wether using cash, financing or leasing.
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*Originally posted by hskhan: *
Faisal Bhai, never said purchasing on cash was easier or better. ( I myself dont have moolah. It was my mommy who bought the van.). Seems that you like pointing the gun to my head when the slightest oppurtunity arises. From all the responses I was the only person that informed you about downside by going the $0 way."Gimme a break!"
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No, I am not picking on you. Your post explained that anyone opting to get the car finances (0% or whatever) will lose manufacturers' cashback. Yes. True. But if someone doesn't have the full cash, anyway, thats a moot point.
On the other hand, a colleague of mine, just bought a brand new Chevy Suburban. After a lot of haggling with the sales guys (and loyalty for sticking with Suburban brand all these years and what not) he managed to get 0% for 5 years AND also the advertised cashback too.
Moral of the story: Haggle! :-)