Is there really such a thing as zero down payments?

For the life of me I cannot get my wife to understand that no dealership will actually pay off your existing car loan. Although many advertise that they will just to get you to buy a new car off their lot.

I tell her that somewhere nicely hidden in that contract will be the balance you owe on your trade-in. She doesn't believe me and counters by saying, I'm also wrong if I don't believe there's such a thing as "zero down payments," which I don't.

Let's remember that automobile dealerships are in this thing to make money. And especially in these tougher times for the auto industry, they're just happy to break even.

Offering incentives that will cost dealerships money is not how this game works. Somehow, some way dealerships will find a way to make money on every new vehicle sold, zero-down payment advertised or not, as validated in a story appearing in Philadelphia's dailylocal.com.

Deals like paying off your existing loan or zero down payments sound good, but just remember that age-old adage, if it sounds too good to be true, it probably is.

Comments

[Alobar]

This is really funny. I know what you mean, I have same problem with my wife!

[Emma]

Yeah, they find a way to make their money. Whether they give you less on your trade in and lower your the asking price. Your might think you're getting a deal, but read the fine print.

[Ivan]

If you are trading in your car, you might get better terms for a zero down payment deal. If not, the finance charges probably won't be worth it.

[ckroll98]

There are always ways to "tweak" the wording or the pricing of the vehicles. They will show you more for your trade so it looks like they are paying it off, but they will either dip into the profit of the car they are selling, or bump the price to make the numbers match. Dealers hardly ever sell a car for a loss unless the vehicle is costing them more money by sitting around on the lot, collecting dust, burning gas on test drives, or needing more repairs than they are willing to pay for.

[CharlesWayne]

Some deals are better than others. There are thousands of dealerships and countless cars. In times like these, dealers are looking for any gimic or deal that will give them an edge over the other dealers. Be wary and do your homework.

[Zoomer]

There are so few people who even qualify for zero down financing that, although this article makes some good points, they aren't applicable to the majority. Certainly, if one does qualify, the disguised payments are going to be made by the buyer either in the financing or at the end of the loan.

[richmond]

Of course you could get zero down payments and they will pay off your car loan. They'll just make it up (and more) somewhere else. It's little more than a shell game, and some creativity on what expense really drains your wallet.

[mop921]

Dealerships aren't in business to give you a great deal, no matter what they say. They exist to make money. Nothing wrong with that but you have to know that if something sounds too good to be true, it probably is.