I was wondering what type of requirements are needed for 0% financing? I have a pretty good credit score (681 EQ) but I have only had two credit cards for one year. If they check my job it will seem odd because I work for 3 months full time and then go to college for the next 3 months and alternate shcedules. I've recieved a pay check regularly since September, but I will no longer be working in January. I've been doing this for about a year and a half. I do have a savings account with a fair amount of cash though if that helps any. How important is the credit score? Is there a NINA/no-doc type auto loan that could get me 0% finacning?

Honestly, I could probably pay cash and I would only use finacning if it was 0%. I've made a killing in the stock market recently and I could easily make a grand or two with the price of a new car over two years. There are also garunteed investments that I have used (savings account with 5% interest and treasury bill with 5.2% interest) that I could collect interest off of over the term of the payments. There is a small amount of risk, but I will be done with college soon and I expect a large raise then even if I somehow lose a lot of money unexpectedly. I haven't lost any money after two years of investing in several different ways so I think I could use 0% finacning to pay myself the interest that the lender would be getting ;-)

I was just owndering if I have a legitimate shot of getting 0% finacing so I don't get uneeded inquires on my credit report.

O % would be offered in lieue of an consumer cash incentives.

an overly broad statement would be that a consumer with A- thru A+++ tiers would qualify generally.

FWIW, a 0% loan is not always the best deal. But you can't tell my momma that, cause she simply says nothing is better than 0%. So, I quit arguing.

What does it take to get into the A credit tier? Is a 681 credit score enough?

Thanks

If you have to choose between a rebate or zero APR, take the rebate and pay cash. Go with a sure thing rather than gambling in the stock market.

I don't mind the risk of the stock market. I have had a minimum 35% return for each of the past few years. Even if I took the sure bet of putting the cash in my savings account or buying treasury bills (both government insured), I would make at least 5% interest.

Lets assume that I get a 0% APR car loan for 3 years. That means that I need to make 2.7% per month to cover the payment. That would be 33.3% a year so as long as I keep doing what I'm doing, I should get a free car plus interest :-) For December alone, I made 12% which would be 4 payments. After the first 6 months, the risk should be just about nothing because I'll still have the full price of the car to work with. It would take a 16% loss to throw me off course at that point. The most that I have ever lost was 5% and thats very rare. I do have some reserve income too incase anything goes bad.

Is it reasonable to get a 0% loan for 60 months? That would make this even easier to do. I would only need to make 20% a year. Would a 681 credit score give me a decent shot at a 60 month 0% loan? How about a 0% loan for 36 months?

I know that I look at money much different than most people. Have you every heard of anything like this before? I sure wouldn't tell the loan officer that this is what I'll be doing haha.

I've heard of some captive financing that offer 0 % up to 60 months in lieu of a consumer cash incentive.

Or others for shorter terms.

If you are so keen in investment than you should no that there is no such thing as free money, Just make sure when you get the 0% that they don't adjust the price of the car. With the way moody's rates Ford's credit rating, how on earth would they be able to offer you a 0% rate, think man think....

By free money I meant I would have the car plus the price I would have paid when I'm done. Most people would pay the money and just have the car. I do have to trade, but it seems easy enough.

I don't mind financing slightly more cash than the vehicle is worth because at the end of the payments, I'll still have the extra amount that was finacned. Having the extra cash for the term of the loan and thereafter is more valueable than finacing a small amount more initially.

I always thought that the dealer could do 0% finacing because you don't get the cashback for 0% finacning. I won't tell the dealer what I'm doing and I sure won't buy from the first dealer I find without shopping around. With so many car web sites, its really pretty easy to find the going rate for a new car. Maybe I should tell the dealer I'm not sure how I will be buying the car yet, and then ask him what he can do on the price? The trick is to beat him ot the gun.

The whole trick about investing is to use your money to make more money. Its hard to save $10 k or so from your standard W-2 job, but one you have the money is much easier to make another $10 k from the cash you have. By easier, I mean less time you have to put in. My goal is to keep as much cash/stock/asset on hand as possible.

Always negotiate the price of the car before talking about financing. Get a final "out the door" price as if you were paying cash. This figure would include rebates, so if you were to forego them for zero APR it would necessarily need to be adjusted by the rebate amount, but otherwise no matter how you pay that will be your price.

If you're that confident about making such double-digit rates of return, it would be money ahead to finance the car even at 6 or 8% APR to keep the cash to invest. Especially when you're going to pay off quickly, conventional finance is often a better deal than zero APR at a higher price.

If the original poster wishes I can move this topic to the money management forum

too esoteric for my tastes unless specifically concerning automotive financing.

I haven't lost any money after two years of investing in several different ways


Any ways you can share????

Sorry I didn't mean to get off topic so you can move this thread if you want. I was really asking about the credit score you need for a 0% loan to start off with.

The way that I trade is to find three stocks very close or at their 52 week low that are recognizeable companies. Preferably they will be less than $10 each, closer to $5 is better. Then as soon as they go up just a little bit, I sell them ASAP. Even if they go up just .05 or .10 I can make good money off them since I buy a lot of shares. Since they are at the 52 week low, there is a good chance that the price will go up since its the lowest it has been in a long time. Don't get greedy, take the nickel or dime gain and trade again. The longer you hold the stock, the greater chance for the value to decrease. I like to buy and sell within 3 days because there is no reason to hold the stock after it already made money.

If a $5 stock goes up just .05, that means I just made 1%. If it goes up .10 then thats 2% and so on. I only need to make 3% each month to make the payment for an 0% car loan for 36 months.

Also, if stocks are just below $5 per share and they aren't IPOs, there is a good chance that they will go up because the company knows that if they stay below $5 for too long they will get booted out of the big name markets. So they will work hard to get the price up above $5.

I obviously check for lawsuits against the company and things that are a red flag. I usually avoid drug companies since their product can be denied by the FDA and their stock becomes worthless or loses a huge amount (if they have more than one product).

If the price goes down, I don't sell until it goes back up. Remember I only want to make .05 or .10 and the price of the stock was at or near the 52 week low when I bought it so there is a good chance its going up. The longest that I have had to hold a stock was 2 or 3 three weeks and after that it made money.

Thats what I do but there are a million different straegies.

I only wish it were stricly a FICO score question I could answer.

I understand that more than just hte FICO score goes into it.

I have a co-op job while I'm still in college and I work for 3 months and then don't work at all for the next three months. I have done this for about two years now. Do you think that this type of arrangement would count as a year of employment? I have worked with the same company the whole time and it was known ahead of time that it would just be for three months.

The dealer I talked to said that when they have 0% financing they generally want to see:

1) FICO above 700 (check)
2) Low debt to income ratio (I pay off my 2 credit cards each month and keep the balance less than 50 - check)
3) 1 year employment (maybe)

each mfg captive finance source would have an internal score card that will assess the risk factor associated with the granting of credit and assign a tier. They are heavily weighted towards a LTV model.

Marv..aren't mother's a kick?My mother -prior to her death a few years ago, purchased a new oldsmobile from a dealership in Denver owned by John Elway. She wrote a check for the window sticker price plus dealer charges and got a signed football. I lectured her on available discounts and she silenced me immediately. "It is my money and if I want to give that nice quarterback boy a check, I will and don't mention it again". I didn't say another word about her car purchase.

As it's been stated, usually accepting the rebate is a better deal than 0%...However, one should do their homework to ensure that's the case...The formula is the amount of the rebate, the total cost of the loan and the alternative finance rate...In the event you're getting a total loan for $50K, the rebate offering is $1000 and the best rate you can find is 7%, the 0% would be a better deal...One more thing to watch out for, when 0% first came out, there was one lender, GMAC I believe, who had an early payoff fee...Ensure there isn't one and if there is, factor that into the equation...

Why would anyone want to pay off a zero APR loan early? The total of payments will not be lowered by paying off early. The early payoff fee, if it exists, would only be an issue for selling or trading the car before the end of the loan.

If you paid extra (no rebate) to get the zero APR, the earlier you pay off, the less you save versus conventional financing on a lower original amount. Even with no fee, the zero APR deal becomes less attractive if you intend to sell or trade before the end of the loan.

LOL

To me, $20,000 in cash is much more valueable than a $20,000 car. I would even say that $20,000 in cash is more valuable than a $23,000 car. The reason why I think this is because after just one year, I can invest the money and use $20,000 to make more than $23,000. However, the $23,000 car might only be worth $20,000 after a year. I am 100% sure that the car will decrease in value, but I know I can use the cash to make more money relatively easily.

If I have to pay 6% interest for example, that means I need to make .5% more from the stock market each month. So on a 36 month loan I need to make 3.3% per month instead of 2.8%. The difficult thing about doing this getting the return high enough. The number one priority is to get the percentage I need to make each month as low as possible.

The amount of the loan is really irrelevant to some extent since at the end of the term of the loan, I will still have the amount of the loan in cash. So finacning a few thousand more into the loan just ties it up for 36 months. I still get to keep it after 36 months. Ofcourse I don't want let the dealer add $10 k to the price which is why I'll shop around.

I agree with ya on that, as I'm sure you know, you can get 0% apr from a credit card eliminating the tie to an auto...I've learned my lesson and will never buy a brand new auto again...I just bought an USED '06 chevy colorado...If I bought it new at a dealer, it would invoice at $16K...It has 15K miles, in perfect cond other than a massively scratched bed...The dealer wanted $11K, after going back and forth for two weeks, the dealer sold it me $9K out the door +$200 if I wanted to use a CC which I did...My leverage was that I could buy an new '07 with 0% and a 100k warranty w/rental (the '06s only have the standard 36K warranty) With the credit card I got the reward which is about $175 and I have 0% on the card for 14 monthes...Now, the truck has taken it's biggest depreciation hits and I still have 0% on the loan...

The vaue of the car any day after you buy it will be the same decreased amount no will matter how much the purchase price was or how you pay for it. Assuming the decision has been made to buy a particular new car, that's one of the things that goes along with it.

My point was that in the end, regardless of what you do with other money that is outside the car deal, the car may cost you less by taking the rebate and financing conventionally at market rates instead of the manufacturer's zero percent deal. Whether you look at it in total of payments or present value terms, run the numbers and see.