0% or Cash

[GolfMcPopps]

Hey Everyone. Getting ready to buy a new Denali and trying to decide what makes more sense. I will probably trade the truck in in 2-3 years as I put lots of miles on them. 
 

trying to decide whether to finance with GM 0% or take all the discounts. I would get 6k off sticker and 0% or $12K off sticker with incentives and APR around 4%. The payments are pretty close but does it make sense to take more discount so the amount financed is less and less likely to be underwater on the loan.....

[smrr1]

If you are trading in 2-3 years take the rebates. 0% only pays off if you plan to keep it and pay on it longer. 

[jeremyp]

This is a pretty simple math problem to solve. Simply calculate your interest over the time you plan on keeping the car Based on the amount financed and your 4% interest rate. If the interest amount is greater then the added discounts then take the 0%. If not, take the cash discount.

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[GolfMcPopps]

Thanks For the help!

[madconcept]

I plan to keep my current 2019 Sierra for a long time.

I chose to finance at 3.99% and take all the incentives vs doing 0% because it worked out a lot cheaper in the long run.

I also stretched out the financing to 8 years as 3.99% is less than my LOC at 4.5%.
I can also pay it out in full anytime although I would rather pay out my LOC first.

[Mandalorian]

You can also take the incentives, then refinance for a lower rate

[batman900]

I had this decision on mine also. After doing the math, I would almost break even either way after 3 years because of how you pay most of your interest up front and then it trickles down. For me the difference was only 4k though, not 6 but it's also a cheaper truck. It was 13k off or 9k off and 0%. At the time the lowest rate I could find to refinance from GM was about 4.3% for 72 months.

 

Since I am trying to break a habit of trading every 1-2 years, I took the 0% to force myself to keep it at least 3. 

 

Long story short, it sounds like you should take the rebates and not the 0%.

Edited February 15, 2020 by batman900

[UGADawgs]

Take the cash and then refinance at a local credit union. Then pay it off early. 

[spizike9]

4 hours ago, smrr1 said:

If you are trading in 2-3 years take the rebates. 0% only pays off if you plan to keep it and pay on it longer. 

This, plus with rates being so low you wouldn’t pay 6k in interest anyway so 0% should not be in the conversation at all. 

[Bob2C]

Take the rebates. You’ll be ahead. Best thing to do is take rebates, finance with GMAC, then pay off the loan within 4 days if you can.


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[davester]

...yes, pay it off immediately, even if the dealer says you have to wait X months...it's not in the loan terms that the loan can't be paid off immediately.

[Bob2C]

...yes, pay it off immediately, even if the dealer says you have to wait X months...it's not in the loan terms that the loan can't be paid off immediately.

Exactly. Loan states no prepayment penalty. Dealers just want you to wait so they get their kickback from gmac.


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[OnTheReel]

I doubt the 4% APR he’s been quoted is on a loan through GM Financial anyway. Everyone on here who has used them to get incentives was at like what, 10%? Something crazy like that. 4% still seems on the high end, but not GM Financial high.

[Mr Vee]

Agree with all that has been said. I plan on keeping mine awhile (had my tahoe for 12 years). For me though it still made sense to take the $6k as the dealer was able to still get me 3.31% for 72 from a local bank. If you google financing vs rebate there are some sites where you can just plug the numbers in and it will show you the differences. I ended up putting more down too than I originally thought and that saves even more on the interest. I usually end up paying off vehicles early too which would not gain me anything on a 0% loan.

[ShamrockShooter]

I always take the rebate unless it's a rediculous difference. If you take the 0% and wreck the car driving off the lot you are not going to realize the benefit of the 0% interest savings.

I got 2.6% for 66 months through my credit union so Definitely worth taking the rebates. It would be different if loan rates were like 7 % but they are not for most

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