So Hyundai recently raised their finance rate for the 60/84 from 0% to 2.6%. why?

[Ebtek]

back in nov/dec/jan it was 0% for the 2008 models. all their finance options were 0% across the board...now, they bumped it up to 2.6 across all finance options. anyone have any idea why this would be? it doesnt make sense. i thought dealerships were still having a tough time.

its not even like they raised their $6000 cash purchase price incentive to offset this difference.



also, how can the effective finance rate be calculated in a 0% vs cashback scenario?

suppose a purchase price of $45000 at 0% interest. or $6000 off the cash price. what would the equivalent finance rate be if someone seeked their own financing, and took the "cash" deal?

[mazdubb]

Hyundai is actually doing well.

http://www.forbes.com/feeds/ap/2009/02/03/ap6002572.html

[woobie]

It could very well be they couldn't sustain the offer of 0% financing any longer.

[AGR-1]

Hyundai is doing well! They have the luxury of raising their prices / packages?

Why should they give their product away?

Dynamic pricing is month to month, what makes sense one month, does not make sense the next month.

With the carnage that is ongoing in the automotive industry, all the stakeholders need to make money.

[spf1971]

One of the reason why auto manufacturers are in trouble is because they were offering 0% interest. Some are now realizing that they have to stop doing it and so people will start to pay the actual financing costs.

[TodayHello]

The subvented rates are still very competitive with several 2009 models still carrying 0% or 0.9% financing.

Same with Chrysler.

[Ebtek]

One of the reason why auto manufacturers are in trouble is because they were offering 0% interest. Some are now realizing that they have to stop doing it and so people will start to pay the actual financing costs.

i always figured the 0% is a marketing gimmick. it all depends on how you look at it. typically, when you take the 0% offer, you're paying anywhere between 5k and 10k more for that "offer".

in reality, the price of the car is the cash purchase price. when you opt for the 0% financing, the cost of borrowing is blended into the new price

[Jucius Maximus]

It's true that 0% is really a marketing gimmick, and the cost of all the interest that you would normally pay is built into the price of the car. (This is why many auto-makers often offer cash incentives. If you're not financing, there's no cost of interest, so they drop it from the price of the car.)

What I think has happened is that banks are not offering really cheap and easy money anymore due to the financial crisis, so the cost of the interest in financing has become significantly greater than the margin built into the price of the car. Therefore they had to raise the interest rate to compensate.

[MaDgamEr]

Part of the reason was that in Feb you can combine incentives AND subvented financing on all models, wher previously it was only a few of the smaller models.

We just bought our 08 Entourage GLS last week. Previous offer was MSRP - ~$2k and 0%. Now we jumped on MSRP - $2k (previous offer) - $8k (factory holdback) AND got 2.6%... So all in all paid $32.5k OTR... Saved an additional $6,400 from the jan incentive.

So it all depends on what you're buying and what they're trying to move off the floor.