Some of your assumptions may be inaccurate.
1. It's not $3k or 0%, it's $1k or 0%.
2. People don't get 'lured' into 0%. As you stated yourself, only persons with the best credit qualifies. Meaning, usually only financially responsible/savvy people qualify, and they know what they're doing, and are not getting 'lured' into anything that they believe is unfavorable to them.
3. This is an economy car that is way below the price of an average new car; however, it's still a significant outlay. Not everyone can afford higher monthly payments, much less paying off $20k in a year.
4. New car loan rates are probably closer to 3.9 than 1.9%. So someone taking 0% at $20k is saving about $1.3k over someone who pays $19k at 3.9%. BUT, even at your 1.9% rate, the one paying $20k at 0% is still slightly ahead.
Personally, I'd rather pay $1k more but carry a 0% interest loan for as long as they let me. Unfortunately for me, that only meant 72 months. But, in doing so I'm able to invest the money I don't have to lay out and earn interest on it. That also means I can earn interest on it for longer, because my payments are for 72 months rather than your 36-48.
DEss
Ah excuse me none of this assumption.
1. Current Rebate on Ford.com and at my dealer is 3k! That is a fact and I know it because I am currently buying a new FiST!
2. You give people to much credit. People do indeed get lured into dealerships on the promise of 0% financing because not many read the fine print before getting gung ho. Only finding out they don’t qualify after the fact.
3. Sound financial advice is sound financial advice and if you read up online most financial advisers will tell you its crazy to take a 60 month loan or even longer 72 and 80.
As you financially can wind up upside down value wise and still paying for something that is essentially worth less than what you owe.
4. Like I said earlier the curent rebate is 3k and getting 1.9 financing on a new car is not hard. people with credit scores of 670 have done it 3.9 is ok but not great and people with scores around 660 or below usually wind up with loans in that range. Credit scores go along way towards low finance rates.
As far as Rebates vs loan rates indeed in your shoes you are coming out slightly ahead. Though I am not sure when you bought your car as the Rebates for ST’s has been hovering at 3k for the last two years all over the Westen U.S. amd if you go to Ford.com its even listed in their incentives.
Given that the advantage goes to takingas your savng 3k that would otherwise get spent and eaten up in depreciation.
As far as money earning interest in the bank goes thats a joke and I am surprised you even tried to use at an example. The Savngs return rate on an account that has 10k in it is 1.5%
If I have 10k just sitting there that i can pay off my loan with and own my car outright without the long term debt I am in a much stronger financial position.
Oh and I really hope you do slam that 72 month loan as long term debt is a a real pain . You may think 6 years is not a long time... but its a long time for a car that is depreciating faster than you pay the loan off.
Which these cars do fall into the category of.
Again not making any of this up or assuming this is just financial awareness of how this all works from epxerience and study.
I am only posting this stuff so people will know and understand the ins and outs of these things.
There are lots financial sites that post this, you shoudl always look at both sides of the coin when buying a car.
Good luck with our financial endevors.