| Vancouver Auto Chat 2016 VAC Community Head Moderator: Raid3n |
 | | 
04-25-2018, 07:05 AM
|
#1 | | Rs has made me the woman i am today!
Join Date: Jun 2002 Location: Vancouver
Posts: 4,461
Thanked 1,276 Times in 308 Posts
Failed 25 Times in 12 Posts
| 0% Financing
Can you guys school me on the pros/cons of 0% financing on a car?
I'm looking at a Mazda3 and they're offering 0% from 1 to 6 years.
The advertised cash discount is $1k while the finance discount is $750, so it doesn't seem like there's any major advantage to go in and pay in full, unless they have some massive cash discount that's not advertised.
I have enough in my TFSA to buy the car outright, but I'm earning around a 10% return, so it doesn't make sense to me to pull money out if the rate is 0%.
Is there any reason not to finance at 0% and take the full 6 years? I tend to keep my cars for a long time. I'd imagine I'd keep it for >10 years.
| 
|  | |
04-25-2018, 07:13 AM
|
#2 | | I contribute to threads in the offtopic forum
Join Date: Oct 2011 Location: Richmond
Posts: 2,674
Thanked 3,841 Times in 998 Posts
Failed 370 Times in 115 Posts
|
Some ppl don't like seeing monthly payments, either than that. Not really. It's "free" money.
| |
| | |
04-25-2018, 07:43 AM
|
#3 | | OMGWTFBBQ is a common word I say everyday
Join Date: Oct 2008 Location: Coquitlam
Posts: 5,324
Thanked 3,782 Times in 1,242 Posts
Failed 533 Times in 187 Posts
|
In your situation I would just take the 0% financing.
Or, since you have cash. Buy a used car (3-5 years old) and save significantly on depreciation. But, you'll be losing out on some of your 10% return that you would get otherwise in your TFSA.
__________________
'16 Ram 1500
| |
| | |
04-25-2018, 07:45 AM
|
#4 | | OMGWTFBBQ is a common word I say everyday
Join Date: Jan 2004 Location: Van/Bur
Posts: 5,025
Thanked 1,561 Times in 514 Posts
Failed 60 Times in 33 Posts
|
Keep your money in TFSA as that's basically free money. Finance the car at which ever term you're comfortable with. I personally would prefer to pay the vehicle off as soon as possible instead of going to a max term of 6 years but that's just me. I'd take 0% financing any day over spending my TFSA's.
__________________
Cash Rules Everything Around Me!
Current:
2006 Honda Fourtrax Rancher 400cc ATV (Offroad trails + Winter Snow Plow)
1995 Toyota Tacoma (Toy Hauler)
2003 Honda Civic SIR (Daily Beater)
2018 KTM 390 Duke (Gas Saver)
2017 Subaru WRX Sport-Tech + STI 6MT (Weekend Track)
Past:
2014 Honda Grom
1971 MG MGB Tourer
Kayo MR125 Race Bike
2001 Honda Odyssey
2009 Toyota Corolla CE
2007 Honda Ruckus
2007 Husqvarna SM610 SuperMoto
2001 Honda S2000
| |
| | |
04-25-2018, 07:48 AM
|
#5 | | I answer every Emotion with an emoticon
Join Date: Feb 2005 Location: somewhere
Posts: 7,906
Thanked 2,485 Times in 1,007 Posts
Failed 1,234 Times in 307 Posts
|
when I got my Hyundai back in 2011, it was 0% financing... if you dont mind the long term, its pretty good.. my term was 7 years.. it will be done in June 2018!!!!!
get a car with the most features, after 3-4 years will you wish you want it.. I got the trim just above basic and it was alright.. should have gotta the sunroof and everything..
| |
| | |
04-25-2018, 08:03 AM
|
#6 | | RS.net, helping ugly ppl have sex since 2001
Join Date: Feb 2011 Location: Richmond
Posts: 8,443
Thanked 14,877 Times in 3,885 Posts
Failed 471 Times in 216 Posts
|
Just make sure you have it written in that there’s no penalty for paying off in full at any time. So if you got the 6 years but decided after 3 to just pay it, you don’t get dinged
| |
| | |
04-25-2018, 08:07 AM
|
#7 | | My AFC gave me an ABS CEL code of LOL while at WOT!
Join Date: Mar 2005 Location: Vancouver
Posts: 1,861
Thanked 4,923 Times in 1,117 Posts
Failed 16 Times in 14 Posts
|
^^ I've done that twice with mazda - unless something has changed there's no penalty for early payoff. might have been a small doc fee
__________________ Quote:
Originally Posted by westopher  replace that wood for who gets producer the wood. | | |
| | |
04-25-2018, 08:19 AM
|
#8 | | :: Sells McLarens, Not tofu :okay: ::
Join Date: Aug 2007 Location: vancouver
Posts: 10,754
Thanked 11,826 Times in 3,334 Posts
Failed 211 Times in 89 Posts
|
There’s no small doc free for early pay out except on leasing.
0% by all means take it. Use the liquid cash else where and save it for a rainy day.
__________________
13' Nissan DBA-R35 GT-R Black Ed - Black met. - "Sophia"
90' Honda EF Civic HB // 04' Honda Pilot Granite
- The Drinker of Many Many Coffees @ McLaren Vancouver
| |
| | |
04-25-2018, 08:20 AM
|
#9 | | Rs has made me the woman i am today!
Join Date: Jun 2002 Location: Vancouver
Posts: 4,461
Thanked 1,276 Times in 308 Posts
Failed 25 Times in 12 Posts
|
So it looks like paying out in cash would give me a $1500 discount.
$1000 rebate and $500 loyalty discount.
Financing would only yield $750 rebate. Still seems better to finance. Other than just having to deal with longer payments, there's no cons with going as the longest term available at 0%?
| |
| | |
04-25-2018, 08:22 AM
|
#10 | | :: Sells McLarens, Not tofu :okay: ::
Join Date: Aug 2007 Location: vancouver
Posts: 10,754
Thanked 11,826 Times in 3,334 Posts
Failed 211 Times in 89 Posts
|
Not at all.
Don’t feel comfortable? Pay it out next year.
__________________
13' Nissan DBA-R35 GT-R Black Ed - Black met. - "Sophia"
90' Honda EF Civic HB // 04' Honda Pilot Granite
- The Drinker of Many Many Coffees @ McLaren Vancouver
| |
| | |
04-25-2018, 08:55 AM
|
#11 | | Orgasm Donor & Alatar owned my ass twice!
Join Date: Aug 2007 Location: Paradise, BC
Posts: 6,875
Thanked 6,580 Times in 2,658 Posts
Failed 253 Times in 139 Posts
|
In the past, I have seen some bs 0% financing advertisment to state (in small print, no less) that there will still be a 1% admin fee or some utter bullshxt when the 0% financing deal is taken. Read the fine print carefully, and make sure it is really 0% before you commit.
| |
| | |
04-25-2018, 08:56 AM
|
#12 | | My dinner reheated before my turbo spooled
Join Date: Oct 2002 Location: vancouver
Posts: 1,766
Thanked 640 Times in 242 Posts
Failed 12 Times in 9 Posts
|
When i bought my wifes car they would not negotiate the price with 0% financing but if we paid in full we would get $4,000 off. So we did that instead.
| |
| | |
04-25-2018, 09:03 AM
|
#13 | | I contribute to threads in the offtopic forum
Join Date: Apr 2001 Location: VAN/RMD/BBY
Posts: 2,595
Thanked 1,022 Times in 450 Posts
Failed 54 Times in 30 Posts
| Quote:
Originally Posted by 320icar Just make sure you have it written in that there’s no penalty for paying off in full at any time. So if you got the 6 years but decided after 3 to just pay it, you don’t get dinged | Why would you want to pay off a 0% loan early? You can literally earn 0.00001% interest and you'll still be better off.  | |
| | |
04-25-2018, 09:26 AM
|
#14 | | RS has made me the bitter person i am today!
Join Date: Feb 2013 Location: Vancouver
Posts: 4,865
Thanked 7,763 Times in 2,315 Posts
Failed 409 Times in 181 Posts
| Quote:
Originally Posted by Spoon Why would you want to pay off a 0% loan early? You can literally earn 0.00001% interest and you'll still be better off. | Say you are trying to get a mortgage or loan, having payments elsewhere looks bad, although it sounds stupid, having a smaller cash contingency and no other monthly payments is preferential to most institutions.
| |
| | |
04-25-2018, 09:29 AM
|
#15 | | Rs has made me the woman i am today!
Join Date: Jun 2002 Location: Vancouver
Posts: 4,461
Thanked 1,276 Times in 308 Posts
Failed 25 Times in 12 Posts
|
Alright, at 0% financing for the full 6 years, would you guys even put a down payment? Yes the monthly payments would be higher, but not to a point where it would make a significant impact to me.
| |
| | |
04-25-2018, 09:39 AM
|
#16 | | RS has made me the bitter person i am today!
Join Date: Feb 2013 Location: Vancouver
Posts: 4,865
Thanked 7,763 Times in 2,315 Posts
Failed 409 Times in 181 Posts
| Quote:
Originally Posted by IMASA Alright, at 0% financing for the full 6 years, would you guys even put a down payment? Yes the monthly payments would be higher, but not to a point where it would make a significant impact to me. | If your reason for doing the 0% and financing is to keep investing the other money then absolutely not, you want to put as much into financing as possible, and delay the payments as late as possible.
| |
| | |
04-25-2018, 09:47 AM
|
#17 | | "They call me Bowser...RawR!"
Join Date: Jul 2001 Location: Vancouver
Posts: 8,226
Thanked 919 Times in 369 Posts
Failed 59 Times in 30 Posts
|
Take the 0%.... I always finance my new cars. Think of it this way... if it's a $30k car and you buy it outright, you'll be out $30k but you gain a car...
If you finance it and you say you're getting a 10% return in your TFSA, you can use the gains to pay for the car. You keep your $30k and you gain a car... the car is damn near free.
That's what I do in theory but in practice, it's not realistic to withdraw from my investment accounts every month for car payments so I leave the money in there and pay for it with work income.
Just make sure you really want the car... I financed a 2011 Sonata Turbo for 84 months at 0%. Made it just past 5 years before I got bored of the car and had enough of FWD. Traded it in for a Genesis 5.0 at 1.9% instead.
__________________
"Damn fine car Dodge... Ran over me wife with a Dodge!", Zeke
| |
| | |
04-25-2018, 09:57 AM
|
#18 | | Rs has made me the woman i am today!
Join Date: Apr 2014 Location: Van
Posts: 4,498
Thanked 1,910 Times in 1,012 Posts
Failed 198 Times in 123 Posts
|
The bigger question is please enlighten us how you get 10% consistent return on your Tfsa
| |
| | | This post thanked by: | 320icar, BIC_BAWS, dark0821, H.Specter, J-Chow, meme405, neo_geo74, The_AK, TouringTeg, underscore, vitaminG, v_tec | |
04-25-2018, 10:10 AM
|
#19 | | "They call me Bowser...RawR!"
Join Date: Jul 2001 Location: Vancouver
Posts: 8,226
Thanked 919 Times in 369 Posts
Failed 59 Times in 30 Posts
| Quote:
Originally Posted by JDMDreams The bigger question is please enlighten us how you get 10% consistent return on your Tfsa | Several dividend funds pay that. PGP, PHK, PFL, PFN, RCS, NCZ, NCV, IEP.
Most of these pay monthly so if you reinvest the returns monthly and compound it, you'll actually end up with more than 10% at the end of the year. Beware, high yield = high risk but over the long term it doesn't really matter. You'll end up with a good average price if you buy regularly. My TFSA is approaching $80k, don't plan to touch it for another 15-20 years.
__________________
"Damn fine car Dodge... Ran over me wife with a Dodge!", Zeke
| |
| | |
04-25-2018, 10:12 AM
|
#20 | | RS has made me the bitter person i am today!
Join Date: Feb 2013 Location: Vancouver
Posts: 4,865
Thanked 7,763 Times in 2,315 Posts
Failed 409 Times in 181 Posts
| Quote:
Originally Posted by JDMDreams The bigger question is please enlighten us how you get 10% consistent return on your Tfsa | my TFSA is invested in the stock market, I've had 10+% years, but it's far from consistent.
Trump is really fucking me right now...
| |
| | |
04-25-2018, 10:52 AM
|
#21 | | Willing to sell body for a few minutes on RS
Join Date: Aug 2004 Location: Duncan, BC
Posts: 10,127
Thanked 5,568 Times in 2,107 Posts
Failed 231 Times in 90 Posts
|
You avoid negative equity by paying in full, but time value of money favours 0% financing IF the difference is properly invested.
| |
| | |
04-25-2018, 10:53 AM
|
#22 | | Old School RS
Join Date: May 2004 Location: Port Moody
Posts: 4,595
Thanked 4,039 Times in 1,231 Posts
Failed 129 Times in 79 Posts
| Quote:
Originally Posted by IMASA Can you guys school me on the pros/cons of 0% financing on a car?
I'm looking at a Mazda3 and they're offering 0% from 1 to 6 years.
The advertised cash discount is $1k while the finance discount is $750, so it doesn't seem like there's any major advantage to go in and pay in full, unless they have some massive cash discount that's not advertised. | If truly it is only going to cost you $250 to get 0% financing then that is an easy decision. It's not actually 0% of course, but certainly close enough that it's a no brainer.
You could literally buy a 5-year GIC and earn a higher return on that money in your TFSA with a guaranteed outcome, and if you are comfortable in the market, you will do even better (statistically... actual results may vary).
There is no possible scenario where it makes sense to take cash from your TFSA assuming you can afford the monthly payment.
-Mark
__________________
I'm old now - boring street cars and sweet race cars. | |
| | |
04-25-2018, 11:06 AM
|
#23 | | SFICC-03*
Join Date: Mar 2002 Location: richmond
Posts: 8,327
Thanked 2,784 Times in 1,121 Posts
Failed 152 Times in 75 Posts
|
you earned 10% on the tfsa before, but how do you know it will continue to rise at that rate?
| |
| | |
04-25-2018, 11:13 AM
|
#24 | | I STILL don't get it
Join Date: Nov 2015
Posts: 470
Thanked 565 Times in 167 Posts
Failed 55 Times in 13 Posts
|
This thread is not giving OP the advice he needs to hear, just the advice he wants to hear. What OP really needs to do is take that $30k and wander over to the Parq Casino, find a baccarat table with panda and start betting heavy on panda. Let all his panda dreams come true! The he will have a free Mazda and his TSFA.
| |
| | |
04-25-2018, 11:15 AM
|
#25 | | I LIKE JDM!!
Join Date: Mar 2004 Location: Lower Mainland
Posts: 8,008
Thanked 2,175 Times in 715 Posts
Failed 13 Times in 3 Posts
|
I want 0% financing on the new Nissan Leaf and 370Z NISMO... but they don't give it to me  | |
| | | |
Posting Rules
| You may not post new threads You may not post replies You may not post attachments You may not edit your posts
HTML code is Off
| | |
All times are GMT -8. The time now is 12:09 AM.
|
You are currently viewing our boards as a guest which gives you limited access to view most discussions and access our other features. By joining our free community you will have access to post topics, communicate privately with other members (PM), respond to polls, upload content and access many other special features. Registration is fast, simple and absolutely free so please, join our community today!
The banners on the left side and below do not show for registered users!
