I put no money down ... got $3K off sticker ... if I took standard financing I would have got $5500 off sticker ....I would had to get a loan at 2.5% financing to break even if I took the extra $2500 ....

If I had gotten 3.9% financing which is a super rate for a new car it would have cost me $1800 more ...

 

Are you planning on paying it off before the term expires? How do you come up with 2.5%? How much roughly did you finance?
If we buy 2 mustangs at the same price, but I take the $2500 rebate and you take 0%, I already owe $2500 less than you. How many months until that breaks even if we both make just minimum payments?
What if we both pay the same amount extra every month?
Every time I pay extra, I save more of my money with less interest paid. Every time you pay extra, you are using your money rather than that free money you borrowed at 0%. Which means you are cutting into your savings.

 

Why would you pay extra at 0% financing ... It's free money? Take the extra and pay off credit cards, mortgage, etc ... Your math works ... but your logic doesn't ...

 

$1800 for the life of the loan?

 

Yes I would be $1800 in the hole over the life of the loan... I financed $34,800 at 0% .. that includes Vehicle + tax, tags and 7YR Bumper-to-Bumper Warranty.

 

Loan calculator with comparison against cash back: http://www.edmunds.com/apps/calc/Cal...sh.tab_link..*

Each way I figure it for the car I am looking at, the $2500 cash back they are offering here, the payment is a wash between say 3.9% finance against no cash back and 0.0% financing.

 

Need to know the amount financed, how many months and what you monthly payment will be.

My goal was smallest payments possible with lowest interest rate possible and lowest total cost of loan. If you add all 3 of those up ... 0% is the only way to go.

Heck you could plug in 3.9% interest for 24 months and the total cost of the loan would look great ... but how much would your payments be?

 

How much did the 2009's drop? I think I remember stories of $7K below MSRP?

But I think they might drop a little more this year, since the new 2011 engines are such a big deal

 

Logic works too, you are not following me. Its ok, lots of people don't understand, even when you show them the figures.
Let's slow this down. You and I walk into dealership. We both agree to buy at $25000. I then take the $2500 rebate off. You take 0%. I owe $22500, you owe $25000. Payments are $350 for 6 years or roughly $420 for 5 years at 0%. In 1 year you will have paid down your loan to $20800 @ 72 month financing. $19960 @ 60 mos. This part is where at this time, I don't have exact specifics, but here is an estimate. $500 is what I will pay for 60 month financing. $425 for 72 mos. Of that $500, how much is principal? If we estimate it at $400 per month, after a year, I would owe, $17650. If its actually closer to $300, its down to $18900. If its only $250 of principal, its down to $19500.
Another year goes by you have paid yours down to $16600 @72 mos. $14920@60 mos. Mine is now at $12900@60 mos, if principal is $400, $14100 if its $350, $15300 if its $300. We are basically even at 2 years if we just make the minimum payment and interest continues to cost $200 a month, but we know that interest goes down and principal goes up.
At 3 yrs @60 mos. You owe $9880, I owe $8100 @$400 principal, $9900@$350, $11700@$300. I think its somewhere between
Does this make sense? I wish I had an amortization table to show everyone. Also come up with concrete #s.

 

I see you have the amortization scale and yes with you financing that much, it does make sense to take the zero. Especially with the rebate being only $2500.

 

When I figured both the 0% for 60 and the 3.9% with a $2500 rebate for 60 the difference in the payment was only 22 cents. That's with a $26K car cost, 10% down and $1200 equity in my trade.

Of course, as of right now, I am only dreaming since I am not ready to buy.

 

I had a choice between 3.59 and $2500 in rebates and 0%.

With my down payment, the 3.59 and $2500 was the far better choice. The amount of interest over the course of the loan turns out to be less than $2500, so it's a net gain to me. The faster I pay the loan off, the less of my $2500 "buffer" gets eaten up by financing costs. I was shocked too until I ran the numbers.

 

about the trade-off of rebate versus financing: some of you probably already know -- you can calculate the exact numbers and compare --

you probably have Microsoft Excel on your computer -- it has a function "PMT" which will give you the payment based on amount financed, interest rate, and payback term. If you calculate the payment and multiply by the number of months, that will give you the total amount paid with everything included. The you can compare what this comes out to if you take the rebate versus the financing.

Here's one specific example:

price = $25,000
with $2500 rebate, 3.9%, 60 months -- payment = $413.36, total payments = $24,801
with 0%/60 financing, -- payment = $416.67, total payments = $25,000
so in this example the rebate is better, but not by much

I would probably go for the 0%/60 financing since it's "free money" and actually less than what you can get from a savings account (though not by much since interest rates are so low these days) so I could do other things with the money in the mean time; and there would be no reason to pay it off early. If you do plan to pay it off early, that changes the whole picture; to get a better idea on that you could run the numbers with a lower number of payments, since in effect you are shortening the length of the loan.

after all is said and done -- I'm going to wait until I can get a good price AND cheap financing!

 

Thats exactly what I am considering for my 2011. I am considering making my interest 0% and my monthly payment $0.

 

So now..... I need to find a Performance White 2010 4.6 GT for $25 000. This is proving to be the trick.

My .02, I would take the rebate, owing less on the car, and am the sort who would pay it off early, or trade it.

 

My local Ford dealer has a '10 GT Premium, which has been sitting on the dealer's lot since last summer.

Asking price is still $36,000.

 

Tell them good luck and keep on walking...

 

that sounds like the best plan of all, except that first payment is going to be a whopper!