Author Topic: 0% 36 months -- why not?? (Read 5701 times)

goodsonr · « **on:** April 16, 2009, 02:43:07 pm »

In a different thread arcticsteve said...

Quote

The 2009 Corolla is 0% for 36 mths. which 1 in 100 customers option for so it's just a clever marketing ploy for ppl that don't read well.

Why wouldn't more people take this -- since I thought most didn't finance a car more than 4 yrs anyway. And, if you have the cash - just throw the money in the bank @ 3% for 3 yrs -- that's $2700 right there (well - minus taxes).

I've never financed to buy a car so a novice in the fine print. Am I missing something and its not really 0% for 3 years or ....???

tks

ron

21Rouge · « **Reply #1 on:** April 16, 2009, 02:51:10 pm »

I assume that taking the 0% means you lose out on any cash incentive on the car provided by Toyota?

You would then need to do the "math". That is the cash allowance versus the interest one would pay to your own financial institution for 3 years at their interest rate.

toolatecrew · « **Reply #2 on:** April 16, 2009, 02:59:15 pm »

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according to Edmunds.com. The most popular loan term is now a payment-stretching six years

The other data I (that I could easily find) was from 2004 and at that time some 70% of car loans were 5 years OR LONGER.

I don't know about 1 in 100 ,1 in 50 1 in 20 etc. What I do know is that a basic Corolla Ce with Auto and Convieinence pack (which I am guessing would represent the most common configuration) at 36 months 0 % is 610 a month. Leasing the same car at 5.6% for 36 months would be 374 or about 60% of the cost.

I'm guessing that people who buy 20K Corollas are more likley $300 a month car payment people than $600 a month payment people. I would agree that the majority of corrola buys who finance probaly are looking for a payment lower than $600 a month.

goodsonr · « **Reply #3 on:** April 16, 2009, 03:11:01 pm »

oh .. I understood that one wouldn't get any cash incentive.

But my question was really from the point of view of a cash-buyer. And in particular - I did a CarCostCanada report for a VW Jetta with 0% for 36 months, but no factory cash-incentive.

Would wandering into a dealership cash-in-hand knowing there is a factory finacing offer give *any* extra bargaining power given there is no accompayning factory cash incentive. As in -- I can save $XXXX thousand by financing at 0% -- so you should take that off the price. Wouldn't they just tell me to take the financing if there is no factory cash.

fon

airbalancer · « **Reply #4 on:** April 16, 2009, 03:18:16 pm »

Quote from: goodsonr on April 16, 2009, 02:43:07 pm

In a different thread arcticsteve said...

Quote
The 2009 Corolla is 0% for 36 mths. which 1 in 100 customers option for so it's just a clever marketing ploy for ppl that don't read well.

Why wouldn't more people take this -- since I thought most didn't finance a car more than 4 yrs anyway. And, if you have the cash - just throw the money in the bank @ 3% for 3 yrs -- that's $2700 right there (well - minus taxes).

I've never financed to buy a car so a novice in the fine print. Am I missing something and its not really 0% for 3 years or ....

tks

ron

AS was dishing the domestic for giving 0% for 60, so he has to write something to make Toyota look good for offing 0% for 36 months

articsteve · « **Reply #5 on:** April 16, 2009, 03:36:21 pm »

Why wouldn't more people take this -- since I thought most didn't finance a car more than 4 yrs anyway.

FON: The vast majority of Toyotas are financed for 5 years. Rarely do ppl finance at 3 years. Few ppl have cash. Even retired ppl are not coming in with cash if the interest rate is low enough. The whole process is essentially focused on the MONTHLIES. Ppl today live monthly. If it weren't for the "monthlies" all the dealer cream like rust proofing, extended warranty, life and disability would practically disappear.

But my question was really from the point of view of a cash-buyer. And in particular - I did a CarCostCanada report for a VW Jetta with 0% for 36 months, but no factory cash-incentive.

Same with Toyota. The 0% for 3 years is to bring ppl into the showroom. If you don't take the 0% there is no special discount off the list. So yes, if you are a cash buyer take the 0% if you think you can make some money on it.

Would wandering into a dealership cash-in-hand knowing there is a factory furnacing offer give *any* extra bargaining power given there is no accompanying factory cash incentive. As in -- I can save $XXXX thousand by financing at 0% -- so you should take that off the price.

NO. The distributer doesn't give a sh*t about the dealer. They run the financing to move inventory and to some extent this benefits the dealer. But 0% for 3 years is a far cry from 0% for 5 years. If the domestics didn't offer 0% for 5 years they wouldn't sell much. At which time they can no longer afford to do so they are in big trouble. If Toyota Canada ran 0% for 5 years on everything all the time dealers would be in heaven providing the company did this forever.

locutusx · « **Reply #6 on:** April 16, 2009, 03:43:48 pm »

what bank is giving you 3% on a savings account?

even the "high interest savings accounts" at the "virtual banks" are at 1.65% or something now

that's below inflation!

AND it's taxed!

Cord · « **Reply #7 on:** April 16, 2009, 06:25:48 pm »

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...since I thought most didn't finance a car more than 4 yrs anyway.

Maybe that was true in 1987. The most common rate I see on used car financing is 84 months.

y2chuck · « **Reply #8 on:** April 16, 2009, 06:35:38 pm »

Quote from: Cord on April 16, 2009, 06:25:48 pm

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...since I thought most didn't finance a car more than 4 yrs anyway.

Maybe that was true in 1987. The most common rate I see on used car financing is 84 months.

84 months? cripes!

quadzilla · « **Reply #9 on:** April 16, 2009, 06:45:40 pm »

Quote from: y2chuck on April 16, 2009, 06:35:38 pm

Quote from: Cord on April 16, 2009, 06:25:48 pm
Quote
...since I thought most didn't finance a car more than 4 yrs anyway.

Maybe that was true in 1987. The most common rate I see on used car financing is 84 months.

84 months? cripes!

When we were shopping for the new car the first numbers out of the salesman's mouth were 72 and 84 months for financing....then I would start laughing and say, its a car not a cottage.

Thinking Out Loud · « **Reply #10 on:** April 16, 2009, 06:46:39 pm »

Quote from: Cord on April 16, 2009, 06:25:48 pm

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...since I thought most didn't finance a car more than 4 yrs anyway.

Maybe that was true in 1987. The most common rate I see on used car financing is 84 months.

Cord, is that a straight 84 mo or 60 mo and a balloon payment?

airbalancer · « **Reply #11 on:** April 16, 2009, 06:48:29 pm »

Quote from: Cord on April 16, 2009, 06:25:48 pm

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...since I thought most didn't finance a car more than 4 yrs anyway.

Maybe that was true in 1987. The most common rate I see on used car financing is 84 months.

At what rate?

goodsonr · « **Reply #12 on:** April 16, 2009, 07:03:45 pm »

84 months -- crickey, I am out of date. I knew I was getting old, but I didn't think I had hit dinosaur-land

Cord · « **Reply #13 on:** April 16, 2009, 07:57:15 pm »

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Cord, is that a straight 84 mo or 60 mo and a balloon payment?

Balloon.

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At what rate?

8%+

Cord · « **Reply #14 on:** April 16, 2009, 08:24:02 pm »

Quote from: goodsonr on April 16, 2009, 07:03:45 pm

84 months -- crickey, I am out of date. I knew I was getting old, but I didn't think I had hit dinosaur-land

If it makes you feel any better the banks also offer 96 month terms for new cars and current model year used cars.

tpl · « **Reply #15 on:** April 16, 2009, 08:42:08 pm »

It would be good for the moral fibre of the country to make car loans a max duration of 48 months. ( and mortgages max 25 years)

if you need 60,72,84 or 96 months to buy a given car then you should be buying a cheaper car..... imho.

toolatecrew · « **Reply #16 on:** April 16, 2009, 08:52:09 pm »

Quote from: tpl on April 16, 2009, 08:42:08 pm

It would be good for the moral fibre of the country to make car loans a max duration of 48 months. ( and mortgages max 25 years)

if you need 60,72,84 or 96 months to buy a given car then you should be buying a cheaper car..... imho.

Sorry "MORAL" fibre??

WHat the heck does the term of a loan have to do with your MORALS?

Cord · « **Reply #17 on:** April 16, 2009, 09:04:08 pm »

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if you need 60,72,84 or 96 months to buy a given car then you should be buying a cheaper car..... imho.

That's a common sentiment - among those that can afford the higher payments that a sub-48 month term generates. Of course, those that can afford to pay with real cash may believe that if you can't pay for a car in full you should buy a cheaper car. I think most people would agree with any standard of affordability as long as it means that they can afford it.

I don't know what it is about the magical $300/month figure but customers wanted that payment in the 90's and they still want it now. At that budget, the $20,000 used car is over $200/mo out of reach!

articsteve · « **Reply #18 on:** April 16, 2009, 09:20:12 pm »

I don't know what it is about the magical $300/month figure but customers wanted that payment in the 90's and they still want it now

Because many ppl are back in that place earnings wise.

Standard of living is rapidly decreasing and future car offerings are going to reflect that. Toyota has a whole slate of wiener vehicles waiting for their glorious NA debut.

Cord · « **Reply #19 on:** April 16, 2009, 09:34:21 pm »

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Toyota has a whole slate of wiener vehicles waiting for their glorious NA debut.

Hmmmmm,