More over I would like to add. Notice that car notes are about the only place you can ever hope to get sub 3% loans?
Credit cards, student loans, mortgages, personal loans, you name it... ALL >3%.
Do car loan companies happen to be more generous, handing out arbitrage out of the goodness of their hearts, willing to give out a little free money to help the little man in purchasing that car?
That 0-2% car loan is a FICTION. No one hands out "free money". They are making up for that low interest in the form of the high-as-hell price of the car being sold. (you'll again note that for lower priced cars and/or not-through-the-car-company financing you don't see these 0-2% loans).
Classic confidence game, the car companies have tricked so many middle-class Americans into thinking they are pulling a fast one on the car companies by getting "free money" at 0-2% interest, when in fact THEY are the mark.
But you're just proving the point. You stopped discussing the decision in terms of what the loan is for and moved to the discussion regarding what the loan rate was for. That's exactly what everyone else is already saying.
If you can get an auto loan for a 0% 2-year introductory period, take the damn loan and then pay it off after two years.
If you can't get a loan for 4% or less, then yes, don't take the damn loan. That's what everyone else is _already_ saying. The fact that it's a _car_ loan has nothing to do with the calculation.
What the loan is for is always important.
If I come up to you and say "I want to borrow $10,000" your first question is "for WHAT"
The car matters here because its the primary thing for which loan are offered with rates advertised as lower than the cost of money. No one can stay business making loans at rates cheaper than the cost of money, so one must critically evaluate where they are "making their money".
There are two ways the lender makes money in these situations:
1) say its 0-2% and bury many-more-% in the form of a higher purchase price.
2) a teaser/come-on rate, 0-2% for x months but a lot-more-% after.
If you are taking a loan out on condition #1, then you are buying too much car or whatever is being sold, the loan is there to make you dull the pain of the overspending. I suspect most 0-2% car loans are this.
If you are taking a loan out on condition #2, well then yes if you can pay off the loan before the 0% expires you are getting ahead on the spread, and they are making their money on the majority of people who will not. Effectively profiting on the misfortune of others less savvy/good with money than you (much like a credit card, they make next to no money on the deadbeats who pay 0% and get 1-3% cash/points back, the money is made on the revolvers). These are more reserved for the furniture/electronics stores.
I guess I just like SIMPLE financial transactions, no arbitrage, no playing-the-spread, just "I give you money you give me product/service" or "I don't want to / can't pay that much, no sale".
Lastly, the car thing matters here because, IMO, CARS are one of the biggest financial blind-spots people have, no matter where on the scale of mustachian one falls. Nearly everyone understands/accepts that credit card, student, pay day debt are bad and generally to be avoided if you can help it. Nearly everyone, even the most die hard Dave Ramsey type, accepts mortgages as a necessary thing. But the CARS, that's where it all goes astray. So many feel that car loans are just a fact of life and cars are "not a big deal" wrt personal finances. When in fact they are one of the biggest cash drains we own. Always depreciating, always breaking. They cost a ton just to operate its bad enough to have to have an inexpensive used one paid off, to throw a loan with lots of depreciation on it... MADNESS.