Financing End of the line for zero financing?

[ultrarunner]

It's a great feeling not to be beholding to banks and finance companies...

As a small child each Thursday I would go with my Grandmother on market day... it always started at the bank where she withdrew cash and then we went on our way shopping.

She never had a credit card in her life and let it be known how much she disapproved when I proudly showed her my Sears Card at age 18... said this is how it starts and made me promise to never carry a balance... words I still live by.

Many of those low and zero interests come with strings such as a late payment triggers all the shadow interest to be added to the bill...

I realize that many simply buy on payments.... it seems to be the American way.

 

[sixdogs]

Being older, I don't finance anything but pay up front and can say there is a big difference between any type of financing and a clean cash deal. That's kind of vague but I've learned how to manipulate this a bit but have found dealers very much prefer cash and will discount for a clean deal. Financing must help them but they know with a cash deal that sweetening the pot with a discount could result in an immediate sale and they do it. This especially occurs with aged inventory that they want to get out of and know it can be gone by the end of the day with the right price..

 

[buckeyefarmer]

Yea, I never found a dealer willing to offer anything off for cash.

Matter of fact, last car I bought last yr, I was going to pay cash, and was told the price would be higher if paying cash, that their offer was based on their financing, at 0%... Of courses I financed with them at 0%.

 

[Tractor Seabee]

After buying the tractor on the financing plan (I made it an auto pay to avoid late payments) I found that the price on implements was negotiable as you cannot finance them on the 0 % deal except as part of the tractor purchase. I am well aware that the financing is a hidden part of the price. Not much choice if you want a new tractor as all the brands are sold the same way. Does that sound like collusion between manufacturers. Also most of the cuts and scuts are bought by small land owners that do have a pile of cash but good enough credit. True farms (filing schedule F), buy larger tractors and that is a lot bigger cash market. My BIL, a corporate farmer, always paid cash at the dealers. But on large items like combines his banking arrangements were cheaper interest than any dealer could offer. He also always bought from the same dealer and could be counted on to buy at least one tractor/combine/etc per year. That changes the negotiation scenario quickly.


Ron

 

[Hersheyfarm]

I just used the 0% financing. To use it you do not get to use a $1000 cash rebate. After dealing was done I asked the dealer to squeeze another $500 out, and they did. But also when you finance, you pay them $250 to file lean and paper work. So to use 0% it cost me $750 in the long run. Still cheap money, but it does keep you tied into the American rat race.

 

[Hersheyfarm]

I have a Muslim general contractor I've done work for. We were talking and I asked why he didn't build more. He explained that he didn't have enough cash to do more. Their faith doesn't allow you to pay interest, or be 'beholden' to another. I jokingly told him he was in America now and supposed to be in debt up to his ears. He said it would have been nice sometimes to be able to. I can say he was never late on any payments and has a nice house, put his kids through college, one of which is a lawyer on a congressional committee in DC. All of this done interest free. Our government is funded partly by interest. It is something to think about, especially as you get older.

 

[TheMadOne]

I would love to be able to pay cash for larger purchases. Two things stop me. Lack of spare "reserve" cash, and credit ratings. The lack of cash could be solved by simply delaying purchase until I have the money in hand, but I want to buy a larger place some day, and I often find waiting carries it's own penalties in lost time(and wages, in the case of things that help me get to work in bad weather). I've been working hard the last several years to get my credit rating up as high as I can to get the best rate on the land. A large part of that is having a solid payment history. When I got my second car I was a "ghost" in the credit system, since I'd only ever paid cash for things. That meant that I had to pay 40% down and a stupid high interest rate, something over 10%. And that was the best deal offered to me. I eventually got credit, then I got sick and had a couple of late student loan payments(made all my other payments, but between hospital bills and the actual illness I slipped up on the student loans). Those killed my credit rating, down into the low 500s. Ever since then I've been working my way back up and currently have a rating in the upper mid 600s.

 

[Tractor Seabee]

I have a Muslim general contractor I've done work for. We were talking and I asked why he didn't build more. He explained that he didn't have enough cash to do more. Their faith doesn't allow you to pay interest, or be 'beholden' to another. I jokingly told him he was in America now and supposed to be in debt up to his ears. He said it would have been nice sometimes to be able to. I can say he was never late on any payments and has a nice house, put his kids through college, one of which is a lawyer on a congressional committee in DC. All of this done interest free. Our government is funded partly by interest. It is something to think about, especially as you get older.

The Bible states the same philosophy as the Koran. Not sure whether modern Judaism practices what the old testament preaches. Christians sure don't, me being one.

Ron

 

[Tractor Seabee]

I would love to be able to pay cash for larger purchases. Two things stop me. Lack of spare "reserve" cash, and credit ratings. The lack of cash could be solved by simply delaying purchase until I have the money in hand, but I want to buy a larger place some day, and I often find waiting carries it's own penalties in lost time(and wages, in the case of things that help me get to work in bad weather). I've been working hard the last several years to get my credit rating up as high as I can to get the best rate on the land. A large part of that is having a solid payment history. When I got my second car I was a "ghost" in the credit system, since I'd only ever paid cash for things. That meant that I had to pay 40% down and a stupid high interest rate, something over 10%. And that was the best deal offered to me. I eventually got credit, then I got sick and had a couple of late student loan payments(made all my other payments, but between hospital bills and the actual illness I slipped up on the student loans). Those killed my credit rating, down into the low 500s. Ever since then I've been working my way back up and currently have a rating in the upper mid 600s.

Modern banking/financing does not support the practice of constitutional religious freedom.

Ron

 

[RickB]

I view credit as a tool. Sometimes it is good practice to use other people's money, other times it is not. I have seen potentially profitable businesses wither and die because the owners decided debt was a bad thing. There is no shame in profiting from the lawful use of others' resources.