Allen K

iTrader: (4)

To be honest I think it is easier to sell it with the discounts. If you're talking to someone and they say "I got it for 5k off MSRP" then it makes it sound like they got a better deal than if they said "I got it for MSRP"

They managed to "save" 5k rather than just pay what the manufacturer wanted.

Pearlpower

iTrader: (2)

Financing at zero interest is losing money and big time which partially explains why GMAC has been a money loser for some time now. You are borrowing money to lend to consumers at a zero payback. It cost them to borrow money just the same as everyone else.

Threxx

GM pays GMAC the interest for you - either up front in a lump sum or over time... not sure which.

It's really just another way of packaging a rebate. All works out the same in the end, though 0% for 72 months equals a pretty huge rebate.

Pearlpower

iTrader: (2)

I would like to see a reference from an outside source on that but it does make sense considering GM no longer has a majority interest in GMAC and the investment group would not take the hit for GM. Why go down with a dead whale?

Threxx

I've seen it mentioned a few times before but have no idea where to begin looking to provide you with a link.

You don't need to see an outside reference if you just think about it for a second.

GM only owns a minority share of GMAC... the majority is held by Cerberus CM. Cerberus is not in the business of charity work for GM, thus they're not about to eat a bunch of 0% finance deals.

Ask Toyota if they get their batteries for free from Panasonic EV. Even if they eventually buy out the remainder of PEV standard business models would dictate that unless PEV is absorbed into Toyota corporate's infrastructure and no longer acts like an independent company, then it would continue to bill Toyota corp for its services so that it could show its own realistic profit and loss, regardless of the vertical integration.

Mr Johnson

Losing money does not equate to making as much money. If their profit margin is > cost of rebate/financing they aren't losing money. They aren't making as much as they would like but they aren't losing.

Exactly, except it isn't really that big. Even at $30K financing @ 7% it's only $2100. Compared to money offered on the hood or in the trunk it is not huge.

You might be right but I'd rather say I spent 28000 vs. 35000 but with a 6K rebate! If so my faith my fellow man continues to decline.

Threxx

That's only for the first year. Granted the balance is reduced by 1/6th per year so year 2 will equate to less rebate, and so on but believe me on a 30k dollar car it's a lot more than $2100... even though their cost of lending is much lower than 7%.

iKenn

iTrader: (1)

i want an escalade now

GATO

iTrader: (1)

its simply robbing peter to pay paul....to stimulate business.

the manufacture rebate from GM is given to GMAC.

So wether GMAC is buying down the rate to offer 0% they still get GM rebate money.

And all 0% deals arent money losers either. Beacause the monthly payment is relativley lower on that specific unit due to 0%, it allows the customer to take advantage of all products and services F&I has to offer, thus, making profit.

bitkahuna

iTrader: (20)

My new Dell was 0% for 12 mos so I went for it. Made the decision easier.

LexFather

Damn dude

bitkahuna

iTrader: (20)

Hehe, yeah, $12/mo. for 112 months.

LexFather

HAHAHAHA, you caught it

Well Escalade sales will rise again its the official car of Atlanta with the 300C