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I'm probably a real PITA as a buyer. I'm very skeptical of anything a salesperson tells me, and I do not react well to pressure. Nuff said.

Currently shopping for TWO new cars, leaning towards a Prius for the wife and a RAV4 Hybrid Limited for me, and I'm not shy about mentioning that as an incentive to dealers. It's the Memorial Day weekend. Of course, big "sales events" at all the car places. Zero % APR for financing on the Prius, 0.9 % for RAV4. Although we are definitely in the market, we've really only started getting serious a few days ago, so while we're not just tire-kickers, there's no great urgency for us to buy this weekend. I always feel that when negotiating $50K in car purchases, one has to be patient and be prepared to walk away - and I'm perfectly comfortable letting the sales guy know that.

I have only been paying attention a short while, but I'm pretty sure that the current zero/low APR options are not going to vanish in a few days (or, teechnically, if it does, it will just be replaced by another deal of equal value). Yeah, there may be "dealer incentives" like $500 off, etc, but those probably repeat themselves endlessly (as long as current economic conditions continue).

So while we're going to make the rounds this weekend, do some test-drives and get more familiar with all the little options, I'm inclined to make the actual purchase when we are ready for it, not based on sales pressure for "today's deal".

My question: is my approach/are my expectations about right? That is, the 0% APR (Prius)/0.9% APR (RAV4) aren't going to suddenly expire on Tuesday - they're pretty much standard and have been running open-ended (for a while at least) - right?

Thanks for your input.
 

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I'm a novice at car buying, but I did just buy a RAV 4 a week ago. Here is what I have learned about those 0-1.9% financing rates.

They are primarily a marketing gimmick. They do exist, absolutely, but only those with immaculate credit qualify for them. They primarily are there to lure you into the dealership and evoke a must-buy-now emotional reaction from you.

For my loan, I shopped around. I used two local banks and a credit union. I then took those loans to the dealership and said if they could beat that rate, I'd go with them. They did, but were decidedly unhappy that I neglected to opt to roll in all of those extended protection options into the loan (read: high profit for them.) It was still a bit higher than 1.9%, and I have very good credit.

Also -- and this is important -- even if you do qualify for the rate, it is that rate or cash back, not both! Every personal finance book I've ever read states that when given the choice between a low rate and cash back, take the cash. The goal is to get that purchase price as low as possible.

One thing I did to get a better feel for just how much a higher interest rate would cost me was to use Google's autoloan calculator. (Simply Google "autoloan calculator" and you'll see it pop up.)

For a 48 month loan of 25,000 the difference between 1.5% and 2.5% is $524 over the life of the loan. Take the cash. :)

You've already alluded to the one thing that kept me level-headed during my buying experience. You don't need to buy today and you are distrustful of salespeople. I kept in mind that my salesperson was simply trying to do his job as best he could, which was to try to sell me a car. I mentally added the phrase "...and remember, I'm trying to sell you something" at every pause in the conversation. :)

One thing I also did to keep my emotions in balance was to regard the vehicle as an appliance -- a refrigerator. It changes much of the sales process from games and frustrations to humorous absurdity.

Best of luck!

--Michael
 
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