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How do dealers make money on 0% financing?
"How do dealers make money on 0% financing? I'm in the market for a car and I saw 0% APR financing from dealers. While that's good for me, I don't understand why the dealer offers it."
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“Dealers don’t make any money on 0% interest loans for
new cars
, or at least for people who make their payments on time.The real way that they make money on 0% financing is by gambling on whether you’ll be late on your payment.
If you read these contracts, the fine print usually shows that there are heavy fines if you miss any payments.
No interest loans are also a way to lure in buyers that wouldn’t normally be in the market for a car, so to that degree, they’re also used as a way to increase sales.”
View full answer
- Gregory R.
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