Zero down! Zero interest! Zero payments for Six Months! It seems like everyone is jumping on the "zero" bandwagon these days! What can go wrong with a deal like that?
Just about everything. You need to know the facts, starting with the fact that these promotions, in my opinion, are some of the most deceptive and unfair I've seen in years. By using word games and by deliberately obscuring details, the promotions hurt unwary consumers' pocketbooks in big ways. Read the very fine print and you'll see this:
- "Zero down payment" doesn't' mean "no money" down. Every buyer still has to pay "tax, tag and license," which can run over a thousand dollars. That's a down payment in my book.
- "Zero Payments for Six Months!" Are the finance companies being nice and making your first six payments for you? Of course not! They are doing one of two things: either adding the six payments to the end of your contract, or, even worse, financing those first six payments. Either way means you pay more interest.
- "Zero percent!" If you've been reading the news lately, you've seen that zero percent is legal bait and switch. According to CNW Marketing Research, barely 9 out of a hundred people drawn to a dealership because of zero percent financing actually get it. To make matters worse, the research company found that consumers don't negotiate on the actual price of the car when they go to dealerships for zero percent. They don't realize the price of the car and the cost of financing are two separate issues. Those consumers can pay thousands more than they need to pay.
What should you do if you're in the market for a vehicle and see one of these ads? Slow down! Remember that speed in the car business can cost you thousands. And take another look at our StraightTalk Car Buying Guide.
Prepared for Corning Credit Union by Remar Sutton & Associates, December 2002. Reviewed March 2007. All rights reserved.
