Car Finance USA

[worsy]

Sat in Mexico watching a bit of cable tv piped in from the US and noticed how cheap cars are both in terms of $$$s and finance rates.

Just seen an advert for a VW offering 1.9% over 36 months; earlier an advert for a Nissan offered 0% over the same period.

Why is money still so cheap when their base rate is similar to ours?

[The Moose]

I doubt many people qualify for that rate.
Or many trim levels exist in inventory.
Or they manufacturer is more interested in subsidizing the financing cost to keep vehicles selling at MSRP.
Or some combination of the above.

[dvs_dave]

Heavily subsidized promo rates for top tier credit customers excluding all fees and taxes on a poverty spec model that they don’t have in inventory (and miraculously won’t anytime soon) just to get you in the door and tempt you into something that they do have on the lot.

[Earthdweller]

From what I have read the US car market is in a bit of a mess

New car Inventory lists are rising massively with some brands having in excess of 150 days stock and the finance deals/list prices have risen considerably

There has also been a big rise in repossessions/finance hand backs

Not a rosy picture at all it seems

[cgt2]

Completely different business model to us. Their system has been payment driven for 50 years, no ordering, everything is stock. Pile them high and sell them cheap. Japanese manufacturers have dominated their market for years.

[Sheepshanks]

Not been in the US since Covid but the monthly lease (I think their lease is same as our PCP) always seemed remarkably cheap, although a bit distorted depending on where exchange rates are.

No VAT in their prices of course, and their pricing is always exclusive of any local taxes.

The spec of even their entry level cars always looked OK to me - usually auto, sunroof etc.

[captain_cynic]

The Moose said:

I doubt many people qualify for that rate.
Or many trim levels exist in inventory.
Or they manufacturer is more interested in subsidizing the financing cost to keep vehicles selling at MSRP.
Or some combination of the above.

This.

Advertising in the US is more or less permitted to lie.

You "could" get that rate and that repayment but you won't. There's no punishment for advertising something most people would be ineligible for.