Hey guys, I'm wondering if its better to finance the car using mitsubishi's 0% over 36 months and put ZERO down. Or would it be better to put some cash down, or perhaps even pay everything upfront?

The way I see it, its probably best to just do Zero down and finance everything over 36 months. I have the cash to pay upfront for the car, but since money inflates over time, the value of money today is worth more than the value of money in the future. Therefore, the longer I can delay paying in the present, the better. I can save money today, and stick it in the bank to earn interest.


Are there any downsides to this approach? Any hidden fees I should be worried about? ETc etc.

 

If you flash cash, you have more dealing power when you go into the dealership.

No car payelments is always a good thing

 

just put the money in a separate account earning interest and setup auto pay from it lol u will make money in the long run

 

Flashing cash to a dealership to get an edge on brokering a deal is a myth. Salesmen care for sealing a deal only. How much cash you have on hand is irrelevant to the ends. Moreover, dealerships make the most money selling used vehicles. When you get a new vehicle, the incentives to complete a sale is actually less, and again, irrelevant to how much cash you have on you.

If you hate car payments, I would suggest having at least 1/4 of the car's cost as down. However, it's always best to have no payments, that's the truth.

 

That's exactly what I am planning to do. I think this is the best route to go to earn some money on the side right?

 

yes

 

Financing at 0% is 100% free money for you. Sure no car payment is nice but make your money work for you.

 

That's exactly what I did.

=J-

 

This.

...and like mentioned, flashing cash is not a good way to get a deal on a car. Car dealerships make quite a bit of money financing customers.

 

This is far from true. Dealers make a ton of money from financing, including interest, incentives from banks/lenders, and incentives from the manufacturer. That's not including items that are sold during the finance process such as extended warranties, maintenance plans, gap insurance, theft prevention, etc. Dealers prefer you finance 100% of the time over cash, even if it is a 0% finance offer.

 

It makes no difference to the dealership how they get paid as long as they get the deal. When I was in sales I didn't care how the customer paid whether it was cash, financing or a chest full of gold coins as long as I got the sale.

A car payment is a good way to build your credit.

 

Actually this is WRONG. You pay cash the dealership gets it all right then. You finance.. the dealership gets it all within 48 hours. Its the same to them. If there is NOT 0% interest rate they actually make more money if they finance your car over you paying cash, because they get a small finance kickback.

 

I chose the 0% financing.

I had a majority of the money saved up to purchase the car, and was contemplating paying cash or doing the 2.9% that was offered, and then they offered 0%. I immediately put all of the cash in a money market account and got the 0% loan. I have been earning interest off of the money while my payments come directly from the account. In the end, I will have a little extra cash.

 

This. Factor in the benefits of an auto loan with every payment made on time, and you're looking at an excellent situation.