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Is it free financing if there is a discount for cash?

Sounds like the financing for 60 months no interest is borderline false advertising. Sure it is for windows, but see the same with cars, price $10,140, 6 years 0 interest for $169 a month=$10,140, cash price $9600.

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A car dealer…false advertising?..noooooo…



No! This isn’t free financing, but is just a gimmick. When I bought a new Toyota 4Runner back in 2003, we negotiated a price. The dealer offered free financing on the negotiated price for two years. The catch was that after that time we either had to pay off the balance or refinance the car at a higher rate of interest. We knew that was coming, so we paid off the loan at the two year period. We, indeed, have free financing for two years. I am certain that the company didn’t want the loan paid off at that point but we had use of the company’s money for two years.

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That’s about 0.94% APR, simple interest. I would not classify it as false advertising. You are just paying someone to assume the risk for six years. They told you there is a discount for cash up front and told you the price paid every month.

I guess my beef is it is not free financing, as I have to pay more, vs paying cash.

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Here’s a lesson in economics. Regardless of the economic system you live under, nothing is free. Someone has to provide it, make it, loan it, using capital and means of production. Pay cash and you lose the gain you could instead make with the cash. Pay on credit and you lose the interest you paid but gain by having cash still working for you. It’s just a matter of math which is better for you and what you think is going to happen over the next 4-5 years. Everybody should do their own calculation and not just believe gimmicks and advertising. OK kids, back to the swing set.

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So now I have to take the stock market, or savings account interest into calculations for how much it might cost or save me, I am like save me the hassle, I will pay cash price. I am sorry I do not have the same impetus to deal with all the caveats, and pound it down to the pennies, perhaps I would have more money now if I could, :crying_cat_face:

Yep. Everyone makes their own decisions. Just saying last year was unusual but a 20% gain so it makes economic sense to leave the money there and pay the 1 or 2% interest for the borrowed money. Everything in the bank, its a toss up.

@Bing. Being a geezer, I like to deal in cash. When I bought the 4Runner, the price was the same whether I paid cash or took financing at 0% interest for two years. This was a no-brainer. Of course I want the interest on my own money. At the end of the two years we paid off the balance in cash.
When I was first married, a local furniture store offered to sell the furniture 90 days same as cash.Since the store carried the note, I accepted the deal to establish credit.
Some years later,.I bought a television at another store on a 90 days same as cash deal. However, this store sold the note to a lending institution. I received a payment book with 2 years of payment coupons. I immediately paid off the bill with considerable argument from the loan company.

I wouldn’t call that false advertising. It’s a little deceptive on the wording, but it seems like they are just charging a little over the cash price to cover the cost of administering 6 years worth of payments. If I were the dealership I’d charge more than that for doing all that check collecting and cashing and bookkeeping. Or I’d offer a bigger discount for a cash sale.

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What kind of car can you buy for $9600 cash? You are not talking about financing a used car for 6 years are you?

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I see no problems with financing an older home . . . taking out a mortgage on a 20 year old house, for example

but I wouldn’t recommend financing a used car for 6 years

In fact, I wouldn’t recommend financing a used car at all

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I think this thread is about replacement windows for a house, not a vehicle. And it really does not matter what the ad says because not all jobs would be the same. It is just advertising.

@VOLVO_V70 perhaps you have seen ads like this on cars, now if you get a rebate instead of free financing, is it really free?
Thinking it was a 1.9% discount for cash but could be wrong, that would be $2800 on a $20,000 car if so.
"With sales remaining sluggish, many automakers continue to offer generous car financing deals such as a rebate or zero percent interest. "

Speaking of that, I read that Ford has about an 80 day inventory on hand which I guess is a lot so they need to push the iron out the door. That might explain why Texas and Florida have not had a big impact on the cars available.

I think it’s all psychology, I go by gas stations that offer “cash discounts”, they never say “credit card penalty”.
I suppose one reason they offer cash discounts is in order to make a cash purchase of gasoline, you actually have to go into the store, where you might make an impulse buy and that’s where the store’s real profits are.

You don’t have to go inside. Using the debit option at the pump gives you the cash discount too.

Not around here. I think it should be that way but I found out that they actually have to pay a transaction fee for debit and so it’s treated like credit…

That’s a pity. We don’t have a ton of places around here that charge more for credit, but those that do have a sign on the pump that says “Debit for cash price”

Yeah, I’m jealous! Frankly, around here it’s often not worth the hassle of going in to pay cash first, especially if you want to fill up and don’t know how much it will take…

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