[noirbot]

Yea, for sure. I got a 0.5% loan on my first car and had a moment when I had some spare cash and realized "Wait, I'm essentially being paid money to have this loan after inflation" and there was no reason to really pay it off quicker vs. just saving/investing the money.

[seanmcdirmid]

What was your loan origination cost? Usually, when the rate is that low, the catch is that you paid $1k to $2k for the loan. This really annoys me...like, the higher interest rate with the lower loan fee would be OK since I'm going to pay the loan off quickly anyways.

[everybodyknows]

Further to that, was the price agreed to before the salesman knew how you would paying, cash or credit?

[Godel_unicode]

You get the best deal (lowest total cost) by finding out which bank pays the highest financing incentives to the dealership (by asking the dealer), financing the car through them, then paying the whole loan off immediately. It’s all part of the negotiation.

[everybodyknows]

Fascinating. Highest financing incentive suggests a commensurately high interest rate. Can we assume there's no pre-payment penalty hidden in the contract?

[Godel_unicode]

You should check, but generally pre-payment penalties on loans have become pretty rare.