Is 0% Percent A Good Deal?
Dear Craig,
0% percent financing sounds good. Why should I buy a Honda at a higher rate?
Skeptical
Dear Skeptical,
You are correct, zero percent deals sound pretty attractive when you hear the ad. But a little research reveals some interesting facts...
FACT: 0% programs are typically offered on cars that don't sell well. The Honda Civic is the best selling cars in its class and the Accord is the best selling car in the US -- period.
FACT: 0% programs are usually limited to very short terms. With a few exceptions, 36 months is the longest term a consumer can expect at 0%. Most people can't afford the payment, even at 0%.
FACT: The fine print usually says something like, "Not all consumers will qualify for the lowest rate." Not everyone has A++ credit or 20% cash down.
FACT: Buying a Honda at 4.75% is a better long-term financial decision that financing other cars at 0%. Look at the math from a leading consumer publication
Total Cost of Ownership
*2001 Model Year Mid-Size Sedans financing $18000.00
Accord LX@ 6.9% Taurus SE@ 0%
$6924
Depreciation $11532
$2257 Finance Chg $0
$9005 Insurance $8390
$3799 Fuel $4947
$1121 Maintenance $1666
$565 Repair $974
$23671 Total Costs $27509
$3838
SAVINGS BY OWNING
AN ACCORD
FOR 60 MONTHS!
*cost information from Intellichoice, Inc.
The Complete Car Cost Guide, 2001
Visit Intellichoice at www.intellichoice.com
