NO PAYMENTS for 9 Months on ALL of our Inventory! APPLY NOW*....
I just saw this doozy advertised on Facebook from a used car dealer. No payments for 9 months, cash back and financing up to 84 months! Wow, what a deal! Or is it?
Disclaimer
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I am not against car financing; I have just seen enough examples of shady stuff that gives all of us in the used car business a bad name.
As someone else suggested, “Where is the beef?” There certainly wasn’t any found in the advertising, but I did find this. “The longer the loan, the smaller your payment.” the old adage – " If it sounds too good to be true, it probably is.”
The following is not intended to attack the practices of any used car dealer; It is intended to hopefully help people to figure out what they may be getting themselves into if they sign on the dotted line. I have talked to too many people who have afterwards said, “OMG, what have I done?”
What to Look Out For?
Cash Back – is not cash back, it is just another name for a loan. You will be paying for the vehicle and any money that they add to the vehicle loan to provide you with cash.
The questions for me are:
1. Is it a reasonable way to borrow money? Going for this option of “cash back” is no different than going to your local bank and asking for a personal loan or line of credit.
2. What is the total cost of borrowing for the car and the personal loan (cash back)? Don’t focus on interest rate and length of time yet – focus on how much is this all going to cost you. And, get them to show you the costs separately – for the car and the personal loan (cash back).
Term of the Loan - how long you are going to go to pay all this back? There are two things to consider with the length of time – it is not as easy as, ““The longer the loan, the smaller your payment.” That is how they hook people – “oh boy, I can get my used car and cash back and only have to pay $300 per month -oops, but think about having that for 72 or 84 months.
1. Are you going to keep the car for 6 or 7 years? That is what you will be committing to if you sign on for 72 or 84 months. Nine out of ten people will not keep their car that long and there the vicious cycle starts. You go to a dealer to buy another car – they add the amount still owing on your first car, and pretty soon your loan amount sky-rockets.
Delaying Payments
Buying furniture, it is not uncommon to see delayed payment plans. “No Payments, no interest for 18 months.” But if you do not pay the whole amount off within the 18 months, read the fine print and you will find that the interest is added to your cost.
Delaying payments for 9 months at a used car dealership – I have not seen the fine print, but I would bet that the interest cost for the delayed 9 months is added to the loan. All I am suggesting is check it out and know the true cost before you sign on the dotted line for your loan.
Just estimating, the additional cost of a $20,000 loan ($8,000 car + $2,000 in fees) and adding $10,000 cash back loan is as follows:
· At 10% interest – Added cost is approximately $1,600
· At 20% interest – Added cost is approximately $3,300
· At 30% interest – Added cost is approximately $5,000
That $20,000 loan just got a lot more expensive and you only have an $8,000 car.
You Need a Car – What to Do?
Don’t get pressured into anything. At Discount Motor City, used car sales, Surrey, BC, our value position is to offer quality cars, at reasonable prices and a sale’s environment that absolutely does not push or pressure. No one needs that and none of us at Discount Motor City, where we believe we are the best of the used car dealerships, Surrey, would want to face pressure when buying something.
If you are looking for a quality used car for sale in Surrey, please come and see us. We have a great range of excellent priced quality used cars and will always be open and transparent about the true cost – and never will you find documentation fees added to our costs.
And DOCUMENTATION FEE FREE at Discount Motor City, the best of the used car dealerships, Surrey BC.
Best wishes and be safe.
