There’s no such thing as a free lunch.
Comment on $1,000 car loan payments are on the rise, stressing household budgets
baines@piefed.social 2 weeks ago0 percent interest auto loans are a thing
D@piefed.social 2 weeks ago
baines@piefed.social 2 weeks ago
who said the car was free?
you’re just not paying interest
D@piefed.social 2 weeks ago
I don’t see any comments about a free car, not sure to what you’re referencing.
The “no free lunch” is a economics principle, no one is giving away anything for free, even as small as a free lunch. Regarding 0% auto loans… these are just another marketing scheme designed to sell more cars because some subset of consumers reported they didn’t want to pay loan interest. Marketing hears that, says great, we’ll design a system where you won’t pay any interest. If it sounds too good to be true, it usually is… except when a billion dollar corporation is the one offering the *great deal, then you can rest assured it’s absolutely too good to be true. Although you’re not paying interest, the total loan amount will be comparable to someone with a similar credit score who is paying the interest rate you would have received had you gone that route.
If you’re making monthly payments, you’re paying more than you would of had you purchased the vehicle outright. This difference is money that could have earned interest in a bank or a return on another financial investment.
baines@piefed.social 2 weeks ago
i imagine you being this obtuse is a byproduct of being so far up your own ass
as to why take a no interest loan when i can buy outright, look up time value money
floquant@lemmy.dbzer0.com 2 weeks ago
No they aren’t, maybe technically but no one is lending money for free, aside from Klarna whose business model is preying on those that can’t pay back
bitwolf@sh.itjust.works 2 weeks ago
During covid my coworker for a 0% interest loan on a 2016 4rinner TRD pro. It was for 80k.
Dudes chilling, taking his time to pay it off, saving for a house.
WoodScientist@lemmy.world 2 weeks ago
Every dollar of interest subsidies manufacturers give is a dollar they cut from discounts and other incentives.
baines@piefed.social 2 weeks ago
where is this world of perfect information you have about car prices?
far as i know i paid under regional prices on the average before even the no interest
but if you have a source i’ll take it
WoodScientist@lemmy.world 2 weeks ago
It’s called critical thinking and common sense. Don’t be a sea lion.
baines@piefed.social 2 weeks ago
yea i’ma gonna take my actual research over some vague logic and feels even if i agree in principle, vaguely hand waving about bad deals while eating interest for the same otherwise price is lol
SaveTheTuaHawk@lemmy.ca 2 weeks ago
You seriously believe a car dealer is losing money?
A car loan is principal and interest. You got a 0% “deal”, you overpaid on the principal.
booly@sh.itjust.works 2 weeks ago
Every once in a while there are multiple parties structuring a deal where someone is left with a bad deal when it’s all said and done. As a consumer, you just have to make sure it’s not you.
But take, for example, the early days of Moviepass. You pay a cheap subscription to a service, and they buy you unlimited mobile tickets at the theater. Too good to be true in the long term, but in the short term it was a good way to spend some money that venture capitalists were giving away basically for free.
Businesses aren’t always smart. Sometimes they make financial mistakes and it’s your duty as a responsible consumer to punish those businesses for those mistakes.
In the case of dealer/manufacturer/financing incentives and the individual salesman commission, sometimes the kickback/fee scheme leaves someone else holding the bag. If you can negotiate a lower sticker price because it comes with some predatory terms on financing, but there’s no penalty for prepayment, it might make the most sense to take the low sticker price (made possible by the lender paying the dealer a kickback for the loans), finance at high rates, and then pay the whole thing off as soon as you can, so that you get the “discount” without having to pay high interest/fees, then you walk away with a good deal in exchange for just a little bit more hassle and paperwork. Sometimes the incentives swing the other way, too, where the lender is affiliated with the manufacturer and needs to juice sales volume by offering below-market rates on financing. As long as you can actually see how everything works and you can find the pain point, it may be possible to get a good deal and dump the bad deal on some faceless corporation for them to worry about.
baines@piefed.social 2 weeks ago
it can be as simple as selling at cost / relatively small loss keeping you in an ecosystem for future knock on profits
not as common in cars but plenty of examples in retail
baines@piefed.social 2 weeks ago
they’re definitely making less margin
captainlezbian@lemmy.world 2 weeks ago
Yeah, now don’t get me wrong, you can get some deals on cars when dealers see the lot space as increasingly valuable compared to the car on it, but they’re salespeople, they’ll swear up and down that that’s the case no matter what the situation is.
You want to know how you can tell you got a good deal? You compare it to what similar vehicles are being sold for at other places, you have an independent mechanic check it out (an honest dealer will be perfectly happy with you doing that), and you ask a trusted financial institution (ideally a credit union) what they would loan you for it. In general you trust that everything a
carsalesperson is doing that sounds good is to keep your eyes on the hand that isn’t in your pocket.baines@piefed.social 2 weeks ago
if you’re having to get another mechanic to look at it, i’d probably not come back
already said fuck you to honda ever again for this kinda behavior
captainlezbian@lemmy.world 2 weeks ago
When buying used you shouldn’t trust any dealer at their word. When buying new yeah you should be able to trust the oem. Unless you buy American, then caveat emptor, don’t know why you thought Ford suddenly started using quality control.