RSR
Platinum Member
In some cases it's even worse. As chance would have it, I bought a new Toyota today. Current incentives for Toyota are a $500 rebate ONLY if you finance. See, so financing is a better deal!!! .Hozzie, yes there can be a multitude of reasons for price increases but that is not my argument. The jist of "0'% as a marketing scheme, has substantially added to the pricing of commodity.
It is the "big lie" about the whole thing that bothers me the most.
The gullible fall for this and run to buy stuff thinking they are not using their money and its not costing them anything to do so. That is total bullshite.
We have a commercial on the local channels right now for a local furniture store staying "when was the last time you went to your bank and was charged nothing for your loan"? "Well we are doing just that at Jordan's Furniture with 0% interest with as much furniture as you want to buy and you have 84 months to pay". I want to shoot the TV every time I hear this ad.
The "plus" for this is totally for the company but they make it look like the customer is the one really getting the advantage and make it seem like "win-win".
0% does several things advantageous for the company: 1, They get to be their own finance institution and able to glom the interest that would ordinarily go elsewhere.
2. they can dictate pricing anywhere they want to appear advantageous. Haggling is reduced to a breath in many instances. 3. They achieve total retail pricing without making it seem so bad for the consumer. 4. They purport how convenient it is for the customer not to have to shop for financing.
5. The scheme is quite ingenious as it increases customer traffic with the customer thinking it is not costing them anything and they don't have to use their own money.
Exactly like you thought.
It is pulling the wool over the publics eyes and I for one, abhor that kind of funny business. I didn't do such when selling Dodge trucks, I don't do it now with working for Mahindra and i will always tell people the truth and show them their best avenues to acquire what they want even to the extent of perhaps they should not be considering such a heavy purchase right now.
I have 3 daughters and when they went to buy cars for themselves, it was like the sharks were circling at the dealerships. That to me was abominable to treat people in such a way because one thinks to take advantage of them.
That is what 0% is for me, taking advantage of people and I will never buy furniture at Jordan's Furniture.
So I told the dealer I wanted to finance it, financed $1,500 of the total purchase price, paid cash for the rest, and will pay off the $1,500 loan when I get the first bill.
As was mentioned, and has been used here as an excuse for why financing is a good deal, most people just look at monthly cash flow, and think if their monthly payment is lower, then they are getting a better deal.