For instance, I was at a ford dealer the other day getting some work done and noticed a sticker on a new Ford Fusion. It had a $500 EXTRA discount if you did the financing through them and the "Rates are as low as 1.99%!" <- no idea on what they really are, as I didn't apply
If you were already buying that car and could save another $500 total by getting the financing. Not the worst deal ever.
We did that buying a Honda CRV last year, after asking a lot of questions about various alternatives, it turned out that we could get another $500 off the price if we financed at 1.5% or something like that, and we could prepay with no penalty (important to check this!). Thus we bought it on payments, and paid it off with the cash we had planned to use for the car 2 months later. It would have been sooner, but we couldn't pay it off until they processed the loan, which took a month, then another month to turn it off. There was one other unexpected expense, the state DMV charged something like $60 to reissue the car title without the bank's name on it when we paid the loan off, but otherwise we came out ahead, though it was some extra work for the ~$360 we saved.
Note that we also have excellent credit, so didn't have to worry about qualifying or higher rates, but I suspect that a lot of people here have excellent credit, at least now that they have been reading MMM for awhile. :)
Yea, the Ford required you to make 3 monthly payments and then you could pay it in full. No penalty after that though. Still way ahead.
