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View Poll Results: Should GM offer 0% financing on all vehicles to help boost sales?
Yes! Offer 0% financing! 222 92.50%
No. It's not necessary (read reasons why in posts below). 18 7.50%
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Old 05-16-2009, 11:30 AM   #1
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Who wants to see 0% financing available from GM on all GM vehicles?

GM is quickly getting to "that day" where bankruptcy could be declared. Sales are lower than ever and it seems that every time I hear another GM story, the sales keep declining and it's more bad news.


I want to know why someone at GM has not implemented a ZERO% financing on all GM vehicles deal. You want to sell more cars, GM? Sell the car/truck at ZERO% financing and your sales will increase pretty quickly!

Imagine it this way...

If I financed $20,000 at a 3.99% rate for a 60 month term (such as we've found from PenFed), my monthly payment would be $368.24

If I financed $20,000 at ZERO%, my monthly payment for a 60 month term would be $333.33 PER MONTH!!!


That's a savings of $34.91 per month and $2,094.60 over the life of the 5 year loan. If someone out there is counting pennies when buying a new car (and I would say the majority of folks care about lowering their monthly payment as much as possible), then going the ZERO% route would be a HUGE deciding factor in purchasing a new vehicle.

Another way to look at it is this.

Let's say I was planning on spending $15,000 on a new Cobalt. I really want that "sun and sound" package they offer for $1,500 but I just don't have that cash to get that option. Therefore, I have to settle for less. It's still okay, but I'd LOVE to get what I REALLY want.

---With the ZERO% financing, I can not only get the car for $15,000, but I could also add in the sun and sound package because I'd be saving just about that much in the term of the loan. Hey...GM could have made $15k, but ended up making $16,500 because they offered the ZERO% financing.

--------

How about the family that could only afford $13,500 and can't buy the car due to the monthly payment being too high? Now they can buy that car they wanted. GM makes another sale (and we all know there are thousands of people out there in this same position who could get the car, but are having problems with getting a good financing rate).


I'm just thinking out loud to myself to lately, "Why can't GM just offer ZERO% on all their vehicles? They want to sell more, don't they? This is the perfect opportunity! Not only would more vehicles be sold, but people might order more options since they know they are now saving a grand or two."

What do you think? Should GM offer something like this to help the company sell more and become more profitable? Or, are there complications I'm not seeing where this could actually be detrimental to General Motors?

OF COURSE....FOR ALL THOSE THAT LOVE POLLS, THIS ONE"S FOR YOU!!!
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Old 05-16-2009, 11:32 AM   #2
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It's a great idea but credit seems to be too tight nowadays, particularly from GMAC which lost a lot of money on bad loans. Even people with sterling credit are getting hosed with high rates. And we haven't even seen the worst of the next credit crisis: credit cards.
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Old 05-16-2009, 11:34 AM   #3
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Why is it a smart business move to loan money for free? Isn't the whole point of it to earn some money back by charging interest?
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Old 05-16-2009, 11:34 AM   #4
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I have been saying this for months....GM and Chrysler should give all of us 0% financing after we the taxpayers have bailed them out.

Does not seem like too much to ask from where I sit.
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Old 05-16-2009, 11:35 AM   #5
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Old 05-16-2009, 11:35 AM   #6
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Yeah I am in favor of 0% financing.
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Old 05-16-2009, 11:36 AM   #7
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Naw, I like 6.99 much better; it's evenly divisible by 3.
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Old 05-16-2009, 11:36 AM   #8
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Originally Posted by Can-Am View Post
It's a great idea but credit seems to be too tight nowadays. Even people with sterling credit are getting hosed with high rates. And we haven't even seen the worst of the next credit crisis: credit cards.
There is a big BUT here!

BUT if as suggested, GM held the paper, GM would be making those credit decisions, and they would be as Tight or Loose as GM chose.

I have often wonderd why they have not gone this route, even if they needed to demand a high percentage down payment.

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Old 05-16-2009, 11:41 AM   #9
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Sounds very good to me. Plus if GM offered 0% financing then all folks would be financing through GMAC correct? Instead of going to their bank or credit union etc.... Right now I'm probably going to finance through my bank becuase it will most likely be the lowest interest rate I can get and not through GMAC.

I think 0% would definitely help sell more cars. Right now people are scared to do anything. I mean hell I'm afraid to buy this Camaro right now becuase I could turn around and be laid off.

I just hope I get my car while the "total confidence" deal is still on. That way if I lose my job I do not lose my car.
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Old 05-16-2009, 11:43 AM   #10
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It's a great idea but credit seems to be too tight nowadays, particularly from GMAC which lost a lot of money on bad loans. Even people with sterling credit are getting hosed with high rates. And we haven't even seen the worst of the next credit crisis: credit cards.
That is right, But how about the fact that GM is going to file for bankruptcy You know that GM is getting money from the fed.
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Old 05-16-2009, 11:43 AM   #11
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0% would help me out a lot
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Old 05-16-2009, 11:44 AM   #12
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When I bought my 2005 Avalanche, I had two trucks on my short list. One dealership tried to give me 5.9% through GMAC and the other offered me 0% through GMAC.

I borrowed 32k and the 0% made the sale a no-brainer for me and really helped out on the payments.

With the market the way it is, I really don't care about the APR rate I'm offered on the Camaro. It doesn't look like I'll be borrowing more than 15k and, if all goes well, I should have it paid off way early.

I believe GM should be offering 0% on all of the trucks, vans and SUV's, but on the cars some cash back might be the better way to go.

For the trucks and SUV's you're going to have people that either want one, or someone that needs one. I would assume most people buying one now actually needs one either for people moving, hauling materials or towing... or some combination of those. Any APR on the price of these things hurts.

If a family is tight purchasing a 20k vehicle, for example, their credit may not qualify them for 0%. $1000 or $1500 cash right off the top might be more helpful for them.

If someone is purchasing a Corvette or the $40k+ Cadillacs, then they should be well enough off that they don't need any special deals.

It's a complicated issue, but hopefully the people that are smarter than me that are in a position to make the decisions will be able to do the right thing.
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Old 05-16-2009, 11:44 AM   #13
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It is no wonder these companies are fightging for their very existance. Take Chrysler for example...a couple of months ago you got EPP, 0% financing, and 1K off a new Dodge Ram....so in essence you got a 44K truck for about 35 K...

Now....nada. They are not building squat, and the inventory on thier lots has NO incentives that I am aware of.

How the hell do they think they are gonna sell any cars?

Wow. Simply wow.
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Old 05-16-2009, 11:48 AM   #14
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Quote:
Originally Posted by HTWLSS View Post
Why is it a smart business move to loan money for free? Isn't the whole point of it to earn some money back by charging interest?
Of course. But, I'll try to explain my point.

Because there are many people who base their car buying decision on a monthly payment (like my mother). There are lots of folks who say, "I can only afford "X" amount per month. So, they either have to save up to get to that amount, buy a different car, or not buy at all.

GM's sales have not been too impressive lately. They want to sell more. It, IMO, is a smart business move IF they want to sell cars and become more profitable, to help those people who want a new vehicle but are concerned about that extra $35 a month.


I'll give you an example based off of my situation.

I'm planning on financing that $20,000. You see my predicted monthly payment of $365. If GM offered ZERO%, then I would be saving myself $35 a month. Over the life of the loan, I would save about 2 grand. My credit score is not shabby at all and I will have no problems with getting a loan at all. If I was saving 2k, I could quickly pour that savings right back into other options. Therefore, GM isn't losing anything. They are still getting their money.

...but, this is mainly for those that are teeter tottering on the purchase of a new GM vehicle. Some folks can't fit $365 into their budget, but can fit $330. It might seem like a small difference, but to many folks, this is the deal maker/breaker.

We see 0% financing on lots of "select vehicles" all the time. You can get "this or that" for zero %. But, you can't get anything else. All I'm doing is saying offer up all the cars for zero%.

My thought process might be off (like I said in the first post). But, I think it would benefit GM in the long run by helping to make the car buying process more affordable.
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Old 05-16-2009, 11:50 AM   #15
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I wish it would happen...I would jump all over it
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Old 05-16-2009, 11:53 AM   #16
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Originally Posted by ssdavidw View Post

If someone is purchasing a Corvette or the $40k+ Cadillacs, then they should be well enough off that they don't need any special deals.

I know we gotta stay away from the politics!

But.....

Oh.....

My......


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Old 05-16-2009, 12:05 PM   #17
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^That's right, though. If you are spending that much, you should be. No politics involved here (or in that post). That's the same as saying, "you are buying a V8 LS3. Who are you to complain about gas prices?!?!"....but, let's try not to go the gas price route, okay?

For that guy buying the vette, maybe he just saved himself $3 grand. You realize that what I'm saying is that this guy could easily turn around and put that back into a HUD system for the car....better wheels....other options. You see? Most people will put the money back into the car (who are buying a higher tier type of vehicle). Those people wouldn't necessarily be affected by the zero %, but would put the money back in. Most folks nowadays simply couldn't afford anything like a new vette or Tahoe. We are talking, majority of car buyers are getting $15k to $20k vehicles. BUT....rather than restrict this to only those buyers, offer it to ALL buyers. GM will 90% of the time get all that money back in options anyway!

It's a win/win for GM and for the buyer.
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Old 05-16-2009, 12:07 PM   #18
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"0% financing is an illusion." This is a statement made by the finance guy in front of my salesman at the dealership this week. I was pissed because the salesman told me to get down to the dealership on April 30th because I was going to lose the 0% financing and the $4,000 rebates as of May 1, on the 3 Silverado’s I was looking at. I ran in there and quickly signed the papers and took off as I was busy working. A couple of days later I started looking the papers over and see I'm not getting 0% and I looked on the internet and GM is still offering the $4,000 rebate on Silverado’s.
I go into the dealership and ask what’s up with this. The salesman starts looking over his papers and says oh yeah, you’re right the $4,000 rebate is still in place. Then he says regarding the 0% financing he has to go get the finance guy. He comes into the room and tells me that since I’m buying for my business I can’t get 0%, it’s only for personal use vehicles. Then he says the 0% is really only an illusion to get people in the door. He says your credit has to be 850 or higher to qualify and good luck with that.
I told them if they needed those 3 Silverado’s to be sold by the end of the month, just tell me that and ask if I can help or do them a favor. Just fricking be honest with me and I’ll do what I can to help. Don’t get me down to the dealership on false pretenses.
Once again, let me repeat what the finance guy told me [I]“0% financing is an illusion.”[/I]
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Old 05-16-2009, 12:19 PM   #19
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Quote:
Originally Posted by Tanner View Post
"0% financing is an illusion." This is a statement made by the finance guy in front of my salesman at the dealership this week. I was pissed because the salesman told me to get down to the dealership on April 30th because I was going to lose the 0% financing and the $4,000 rebates as of May 1, on the 3 Silverado’s I was looking at. I ran in there and quickly signed the papers and took off as I was busy working. A couple of days later I started looking the papers over and see I'm not getting 0% and I looked on the internet and GM is still offering the $4,000 rebate on Silverado’s.
I go into the dealership and ask what’s up with this. The salesman starts looking over his papers and says oh yeah, you’re right the $4,000 rebate is still in place. Then he says regarding the 0% financing he has to go get the finance guy. He comes into the room and tells me that since I’m buying for my business I can’t get 0%, it’s only for personal use vehicles. Then he says the 0% is really only an illusion to get people in the door. He says your credit has to be 850 or higher to qualify and good luck with that.
I told them if they needed those 3 Silverado’s to be sold by the end of the month, just tell me that and ask if I can help or do them a favor. Just fricking be honest with me and I’ll do what I can to help. Don’t get me down to the dealership on false pretenses.
Once again, let me repeat what the finance guy told me [I]“0% financing is an illusion.”[/I]
It is sort of an illusion... for instance up here I think there is legislation requiring automakers to post the 'Effective Interest Rate" of the 0% offer.

It goes like this; Usually we have "Cash Purchase Option" which has a bunch of cash on the hood. You can take the 0% offer, but most of the cash on the hood gets taken away. So the advertisments have to factor that in, as your not really getting 0%. Your 'finance' charged gets rolled into the vehicle price and amortized over the life of the loan. If you sit down and crunch the numbers, at least where I'm from, you can usually get a better deal taking the cash incentives and financing through your personal bank.
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Old 05-16-2009, 12:27 PM   #20
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And we haven't even seen the worst of the next credit crisis: credit cards.
It'd be nice to see our Politicians have the balls to stand up to credit card companies, but apparently (as usual) they don't.
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Old 05-16-2009, 12:30 PM   #21
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Well for one GM does not have any lending. GMAC split off years ago and is mostly a real estate holder right now. It's namesake only but has not ties to GM other than working with them as an outside bank.

But GMAC should offer something like 3-4% to compete with the Credit Unions. Right now NCUA Credit Unions are the best fair deal in rates.

Edit add: Oops not years, more recently.
http://www.autosinsight.com/file/736...the-money.html

Last edited by Vash; 05-16-2009 at 12:34 PM. Reason: Timeline correction
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Old 05-16-2009, 12:37 PM   #22
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One way or other they need to make profit.

If they did offer 0% it is unlikely that they would offer that on the Camaro - simply too much demand.
GM needs to make as much money as possible on the cars that it can sell while staying competitive
Far more likely to do this on cars that they cant move or where they are weak against competition.

Why give away money on a car with 18000 backorders ?

Businesses will always want to maximise profit on new models with early adopters who buy lots of options and higher end models.
Does not matter if talking about cars, motorcycles, computers or bluray players - the folks who buy first pay more money.

Folks who are on here and who are genuinely going to buy a camaro in year one will :
- Have to be patient as production ramps up
- Deal with some early teething problems
- Be prepared to pay MSRP at best
- Expect no special finance deals

If not ready for the above then wait till 2010.
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Old 05-16-2009, 12:48 PM   #23
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0% is somewhat of a gimmick. You can always negotiate a lower cash price than the guy who takes 0%. They recently dropped the 0% on pick-up truckss up here and surprise, surprise - they are selling out the door for 5 grand less. In the end, GM makes the same amount of money and they should be offering this service right now.
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Old 05-16-2009, 01:41 PM   #24
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But as Vash said, GM is no longer in the business of financing cars. So, where would the money come from to finance the car? I don't understand what the process would be. Dealer pays GM invoice....GM gives money back to dealer, less downpayment?
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Old 05-16-2009, 04:32 PM   #25
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It will create more problems than it solves. Part of GM's profitability problems is the overbuilt quantity relative to demand, and so had to discount (fleet sales, incentives, etc) to move inventory. That eats into profitability (of course that all traces back to union greed, stubbornness, and inflexibility). Then consumers come to expect those kinds of incentives and won't buy until they are offered. I bought my Cobalt at 0% financing, and while it is great from a consumer incentive, the salesman mentioned how many people are interested but wait until GM offers 0% to buy (obviously). Until GM can create sales based on people wanting their cars rather than slashing prices to unprofitable levels, they are an unsustainable business entity, period. I do NOT want the state subsidizing unprofitable car sales from a nationalized GM.
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