GM offering 0% financing for 7 years, deferred payments amid coronavirus outbreak

It started to look good for car buyers:

https://www.cnbc.com/2020/03/16/gm-offers-0percent-financing-for-7-years-delayed-payments-amid-coronavirus.html

1 Like

Woah! Just heard that from my Finance Manager friends!
It’s getting ridiculous to where the whole city is under lockdown.
Here, in Dallas, is getting serious too.
Soon or later, it seems like the government is going to declare martial law.

1 Like

I get it that car manufacturers want to “help out” car buyers, but an 84 month loan on a domestic car?

6 Likes

Agree but good future deals indication that will trickle down to leases.

Extreme negative equity. 120 day differed payments. So it’s like 88 month term

7 Likes

Curious if you have any idea when/if Toyota reduced production. Seems like the car manufacturers didn’t slow production down in time. Would imagine that leads to a glut of 2020 models at the end of the model year, which is right when things should be getting back to normal :crossed_fingers::crossed_fingers:.

Edit - :crossed_fingers::crossed_fingers:= we are getting back to normal in summer and fall. Not that there is a glut of unsold inventory.

1 Like

Is there a rebate for paying cash? Then it’s not truly 0% financing.

8 Likes

I was thinking somewhere around $5000 should be an appropriate cash rebate to balance out a 7 year interest free term

They did not yet. Soon or later, the government is going to send every car manufactuer the mandate to stop or reduce its production, especially for Toyota because all vehicles are made in US except for 4Runners and some of the Rav4s

1 Like

Yep it’s the usual thing but they lowered 0.9% to 0% that’s it. If you can get a low interest loan from a local CU just take the bigger incentive offer. 84mo lease is insane to me

UAW calling for a 2-week shutdown:

I said this in another thread, and I’ll say it here. If you need to take a 72-84 month loan out on a depreciating asset, you are buying too much car. The fact that GM cars don’t hold value, good luck trying to get out of it in 3-4 years without being underwater.

The only way a 72-84 month loan makes some sense is if a) it’s 0% financing and b) you plan on driving this thing into the ground.

7 Likes

How do you figure? During the 08 recession, lease deals began to dry up and finance offers took over. Sure, there were SOME deals, but not to the degree you might think.

Captives aren’t going to take the risk in a down economy. For all intents and purposes, on the surface, this has the potential to be worse than 08, with some even saying the “D” word (depression). I sure hope it doesn’t come to that. If it does come to that, lease deals should be way low on your priority list.

I fully expect, for the most part, lease deals will somewhat disappear, and finance will be king in the short term

7 Likes

Unless I misread, these ARE at 0%??

84 months with the typical 10k lease term on here is only 70k miles. Is that really driving it into the ground? It’s entirely plausible to get away without even replacing brakes.

The bigger issue here is everyone wants THE LATEST THREE ROW SUV WITH APPLE CARPLAY AND PANO MOONROOF so it’s a perpetual cycle of not getting past the knee of the vehicle depreciation curve and rolling that sweet negative equity in.

4 Likes

Yes, they are. That said, there will be maintenance involved. Shocks/struts/Suspension components/fluids etc don’t last forever. Battery will need replaced at least once. I know I’d need at least 2 sets of tires. Maybe an exhaust toward the end, if you can’t still get it covered under the federal emission warranty. Point being, there will be at least SOME out of pocket costs, if you maintain it like you should. I know these fluids and plugs are supposed to last 100k now, but if I’m buying something that expensive and intending on driving it for at least 6-7 years, I’d probably change them all at least once for peace of mind. Brake fluid definitely. Most of this stuff I could do myself to save a few bucks. Not everyone can, however.

At 10k/yr, or lower yearly miles, you’re also beating that engine/tranny up more than a longer mile driver would being that highway is easier on a car than local.

Let’s also not forget there are people here 10k underwater looking to get out of their current car into a new one cause they need 15 seats now for their 2nd kid and a bigger sunroof just because.

2 Likes

If GM really wanted to help out struggling sub-prime people, they would offer nothing down, zero percent, 7 year loans with a total payment final balloon due after 7 years.

They would sell many cars with those terms.

1 Like

Mitsubishi did something similar in the early 2000s. The 0-0-0 promotion.

Problem was, it killed resale value and they were left holding the bag on tons of cars that were repoed and now worth a fraction of what they once were. It nearly killed them and they haven’t been relevant here since

11 Likes

Yeah I remember the Mitsubishi fiasco.

My suggestion for GM and balloon loans was not really serious. Most of those subprime borrowers would drive the car until the balloon was due in 7 years and then default.

1 Like

Shocks struts suspension components before 70k?! Exhaust components at 8 years?! That’s not gonna happen on any normal car.

You’re talking about a few hundred bucks in maintenance at the dealer, at most.

1 Like

At 0%? That’s as cheap as money gets. Combine it with a great sales price and you’re cooking with crisco.

1 Like