Ford Credit Question: 0% APR

If they charge a fee for financing, leave. The 0% deal through Ford is not truly a 0%. Nobody gives their money for free. The 0% financing is in lieu of a cash rebate. If you intend to take the entire 60 months to pay off the car, 0% is probably going to work out in your favor. Call a few banks and get a competing interest rate. You might find out that you can do better with rebate and normal rate. The dealer gets normal financing at a "buy rate" below 2%. They mark it up when they contract you between 1 and 3 points. Ask him what buy rate is. Use it as part of your negotiating after you've settled on a price (which should be at invoice).

varunkumar said:

For 30,000$ and 0% APR 60 months. What will be the finance charges. Someone please shed some light on this .Thanks.

Click to expand...

If it is truly 0% financing, there will be no finance charges -- not even so much as one penny.

However, as mentioned, the offer from Ford Credit usually requires forfeiting all or part of the cash incentives. When I bought my car, I had a choice of $2500 in rebates, or a $1000 rebate plus 0% financing for up to 60 months. I chose the latter. Even though I gave up $1500 in rebates, a bank loan would have cost me about $3500 in interest so I still had a net savings of $2000 on a five-year note.

As others stated, the contact should state 0 finance charges. Unfortunately(or fortunately) right now auto loan rates are near all time lows. Run the numbers in a payment calculator to see how it adds up, and remember that if you pay it off or trade it in before the 60 mos is up you will not be gettin the entire benifit of the 0%... Here's my advice, go to Mortgage Rates Credit Cards Refinance Home CD Rates by Bankrate.com, input your numbers with 0% and no rebates, and then Input your numbers with the rebates taken off, and use 2.5%, if the payment is within 10$, go the route of regular financing with the rebates, just Incase you decide 2-3 years from now you need a minivan to haul around the triplets you made because the stang got you laid so many times..

As others had mentioned, you should be able to find a low rate that makes forgoing the 0% in favor of cash and a 1-2% interest rate a better deal for you. I got 1750 worth of incentives and rebates on mine in addition to negotiated price down from sticker. I got 1.75% on my loan which worked out to less than 1k worth of interest after full term of loan. The other thing is that they sometimes plan the "you didn't qualify for 0% but..." card on you. Be prepared.

Either way its always best to deal from a position of power. Get yourself pre-qualified before you walk into the dealer. Then, if they offer you a better promo rate, fine, but if not you don't need play finance games and all you have to discuss is the price of the car.

Think of buying the car and the financing as completely separate transactions and you'll never end up lost in smoke-and-mirrorsland.

This way you also don't have to swallow any BS about you don't qualify for this rate or that rate. As others have mentioned, its not in the dealer's best interest to offer you the best rate going whether its through a bank or through Ford.