Not all cars makers published April sales statistics, but new vehicle sales in the U.S. seemed to have dropped by about 50 percent last month relative to the previous year. The reason for this — the coronavirus pandemic — is obvious, but when demand drops, special deals pop up to fill the void.
Zero percent funding, job loss insurance programs that can defer payments for a few months, and “What’s the world going to look like then?” loans that last up to seven years have all managed to juice some sales — especially pickup truck sales. The sales were targeted directly at the lucrative market and last month helped trucks outsell sedans by about 17,000 units.
The mix of zero-percent finance and long loans may sound like a good excuse to run out and buy a new vehicle right now. But there are plenty of excuses not to take advantage of the headline-grabbing offers right now. The positive thing is that there are as many opportunities to be strategic about buying a vehicle. As there are offers to get when you buy a new vehicle.
With caution, you can buy a new vehicle
Being smart means understanding all the details of a ZERO DOWN, ZERO PERCENT deal that is all-caps. For example, Automotive News points out that deferment of the first few payments works well. For people planning to keep their new vehicle for eight to 10 years. But for those planning to trade in their car after 36 or 48 months. A few months’ deferment can put a dent in the equity they would otherwise have built up. Which means they could owe more when the time comes to trade.
During the pandemic, zero-percent financing proved incredibly common. Edmunds data shows that, in April, zero-percent deals accounted for nearly 26 percent of all financed purchases. This is up from under 5 percent in March and under 4 percent in February. But, while a zero-percent loan that lasts for seven years might sound like a way to get free money. It might allow you to purchase a more expensive car almost as quickly as it would be financially wise.