...that 0% interest car loans are not entirely honest?
There are 2 sticker prices, one is low, and you can get it if you finance normally with an interest loan, and the other higher sticker price is what you get if you want a 0% interest loan.
Soooo.... basically you prepay your interest. It still works out to be a pretty good deal. Just not interest free.
Any others out there?
Bryan
You should see how angry my dad gets when he goes to the till to pay for something and the salesperson says that he has to pay 5% extra because he's paying with a credit card.
It doesn't make alot of sense, but it's happened a few times now.
They spin this story about the price being the 'cash' price and a credit card is not cash.
Although according to me (and my dad) a credit card is 'just as goos as cash'...
Apparently not in SA.
Originally posted by CrowleyThe problem is that the credit card companies take a % off what the store is charging you for the stuff. Let's say you buy something for $10.00, the credit card company only deposits maybe $9.00 in the store's bank account and keeps the $1 as a processing fee. Stores are trying to make the customers pay for the fee.
You should see how angry my dad gets when he goes to the till to pay for something and the salesperson says that he has to pay 5% extra because he's paying with a credit card.
It doesn't make alot of sense, but it's happened a few times now.
They spin this story about the price being the 'cash' price and a credit card is not cash.
Although according to me (and my dad) a credit card is 'just as goos as cash'...
Apparently not in SA.
They used to do that here but now they don't seperate it out and charge a higher price for using a CC. I think they just charge everyone the higher price knowing that most people use a CC to buy stuff.
Bryan
Another good one car dealers use is "Buy now at Invoice... The sticker on the window is what you pay!"... oooh! Whoop tee Doo!
Depending on volume of purchase from manufactures, dealers hard cost for product (vehicles) is anywhere from .58 X Invoice to .91 X Invoice. You can compute their Gross Margin on that and get sick really quick. Then they manage to keep any Manufacturers incentives ... which can be up to 10% of invoice.
the other reason 0% interest is a con is that if 1 in 5 people default on a payment (and believe me, many more than that do) then they make back the money from all 5 people in the fines and penalties that one person makes.
Credit card companies do charge a % from the shop when you use it (American Express charging nearly double that others charge which is why so many places especially small businesses won't accept it), but banks charge the business a % for taking cash from them. This % isn't as big as the credit card companies charge, but debit cards cost less (nothing?). Why do you think shops will give you "cash back" when you pay with a debit card? You save them money.
Originally posted by ChessNutI have never seen a sticker with two prices.
...that 0% interest car loans are not entirely honest?
There are 2 sticker prices, one is low, and you can get it if you finance normally with an interest loan, and the other higher sticker price is what you get if you want a 0% interest loan.
Soooo.... basically you prepay your interest. It still works out to be a pretty good deal. Just not interest free.
Any others out there?
Bryan
They make enough on the sale of the car that 0% interest means nothing to them. Believe me...
Originally posted by willatkinsThey do it all of the time.
I have never seen a sticker with two prices.
They make enough on the sale of the car that 0% interest means nothing to them. Believe me...
Next time you're at a dealer take a look. It's not real obvious and sometimes you have to talk with someone but it's there.
Some of the 'incentives' are not available if you get the 0% interest loan. There are dealers who have a $1,500 cash back option but not if you get the 0%. It's always one or the other. Essentially the cash back becomes the interest earnings of the dealer when you get the 0% financing. You always pay one way or the other.😉