Toyota Camry 0% Interest Rate - What's The Catch?

Major Packer on 31/03/2017 - 10:37
Last edited 05/04/2017 - 14:31

A friend of mine just bought a new Toyota Camry in Melbourne. With a 0% interest rate loan over 4 years. Around $21000 in the loan and $9000 balloon payment. The only fee is a $6.80 one-off fee, I can't remember what it was called.

It sounds like a great deal. What's the catch?

The only thing I can think of is that if you pay cash you can probably negotiate the price a bit, is that true?

Thanks.

Edit:
There is no establishment fee, ongoing fee and other fees (except the $6.80 I mentioned).

How much can you negotiate/have you negotiated (off the RRP) when paying cash?

Automotive

Comments

  • unco on 31/03/2017 - 10:45
    +3

    Pretty sure they don't let you negotiate on the price if you're getting 0% finance.

    • Scrooge McDuck on 31/03/2017 - 12:16
      +1

      That's why OP mentioned it as a catch. 🙄

      • Scrooge McDuck on 31/03/2017 - 12:18
        +7

        Catch 2: You have to drive a Camry.

        • [Deactivated] on 31/03/2017 - 12:21
          +1

          That is no doubt the biggest catch.

        • resisting the urge on 31/03/2017 - 14:41
          -7

          @thorton82: What's worse, a Camry or a Toyota? A Camry has to be one of the worst Toyotas. Perhaps you can get the same deal on a different car.

          I dislike them all. Reliable? As much as most cars. The trouble is the statement they make everywhere… even a GT86 looks ultra-ordinary when it has those awful plastic logos stuck on it.

  • apple2016 on 31/03/2017 - 11:08

    as above, he would have got a better price on the car if it was not for the 0% interest rate usually.

    • stirlo on 31/03/2017 - 11:23

      Not necessarily. When my parents last bought a car they negotiated and offered cash and the dealer said 'Honestly I'd prefer to have you finance it as that helps us meet our target"

      • k-rokfm on 31/03/2017 - 11:50

        Thats probably coming to the end of target times (end of month/qtr etc) where as you can normally negotiate it down that you end up paying less with a higher % loan than you would have with the full price on 0% finance. I cant remember the exact figures, but they were in a thread last time this came up

      • Major Packer on 31/03/2017 - 12:24

        Friend mentioned something similar. The dealer said to him that they can easily sell with the RRP, so wouldn't give a discount.

        • stirlo on 31/03/2017 - 12:32
          +1

          My parents did get a substantial discount but the dealer said they couldn't do more unless they agreed to do finance. I'm guessing he got some kind of commission to sign them up for the finance package.

        • Major Packer on 31/03/2017 - 12:45

          @stirlo: What's the discount like and what car?

        • stirlo on 31/03/2017 - 12:51

          @js1987: about 15% off list on a Toyota Prado. But this was a few years ago.

  • [Deactivated] on 31/03/2017 - 11:14
    +1

    you pay retail price with no discount.

  • ptl93 on 31/03/2017 - 11:16

    A new generation camry, made in japan, is coming out later in the year. I would rather wait for it if I were you.
    If you want to buy the current version, do negotitate as Camry, especially lower grade model, is overstock atm. Source: my friend works in Toyota factory.

  • tomleonhart on 31/03/2017 - 11:26

    Concencus is that you can negotiate A LOT if you don't take up the finance offer.

  • Succulent Synth on 31/03/2017 - 11:26

    As others have mentioned you will pay retail price with no room for negotiation on price or any extras such as floor mats, tinting, reverse sensors etc.

    • Scrooge McDuck on 31/03/2017 - 12:24

      rust proofing, transport charge, storage surcharge, additional overcharge, finder's fee, keys…

  • angryasian on 31/03/2017 - 11:34

    https://www.youtube.com/watch?v=KGPu0jPryfU explains it pretty well. can be cheaper to get your own loan.

  • k-rokfm on 31/03/2017 - 11:51

    As above, but additionally, you will have no ability to negotiate loan fees either. You will have to pay their loan establishment fee, monthly fees and balloon payment (whatever they specify) without being able to change these.

  • electriccurio on 31/03/2017 - 12:07

    That's interesting, I was able to negotiate a deal on the car and able to finance with 0% interest last year with no balloon payment. I only have to pay like $110 for the government fee.

  • [Deactivated] on 31/03/2017 - 12:10
    +1

    https://m.youtube.com/watch?v=W5cukcs_4r8
    Funny with a bit of maths

    • Major Packer on 31/03/2017 - 12:38

      Love that video. But how much can you actually negotiate when paying cash?

      • GaryG on 31/03/2017 - 19:08

        Haven't watched the video but I guestimated that when I bought my Ford Focus I knocked them down about $7000.

        • [Deactivated] on 31/03/2017 - 22:54

          Free automatic lol

        • GaryG on 01/04/2017 - 11:05

          @TightBottom: I guess though it was the only option on that model! :D

  • DarkOz on 31/03/2017 - 12:16
    +1

    What happens after you have negotiated a much cheaper price and then ask for 0% interest finance afterwards? Do they simply tell you that it's only available to RRP?

    • k-rokfm on 31/03/2017 - 13:09

      Yep they will tell you exactly that..

  • RockyRaccoon on 31/03/2017 - 15:06
    +2

    The offer is for a Camry at $27990 on road plus zero percent interest

    The RRP for a Camry is around $33000

    So the "punishment" for zero percent isnt RRP as claimed by many above. Its the same driveaway price with or without finance

    If you elect not to take the "financing" you may get extra off the price, but that like all car deals depends on how you and the dealer negotiate

    http://www.toyota.com.au/special-offers-and-great-value/offe…

    or for a demo its $25990

    http://www.toyota.com.au/special-offers-and-great-value/offe…

  • [Deactivated] on 31/03/2017 - 22:41
    +2

    You sacrifice on your sex life

  • Pandamony on 01/04/2017 - 07:45

    I bought a Toyota Camry a couple of years ago and was offered an excellent interest rate (not zero percent). I did some calculations on the offer including Establishment fees, set-up costs and on-going fees the effective comparison rate was 22.85%. I determined that I was better off doing a redraw on my home loan or getting finance elsewhere.

    I sent the finance manager my calculations and she said this "I understand what you mean in regards to the final repayment amount, it’s due to the Establishment fees and set up costs for the loan which brings it up so much, a lot of the time you are better off with a personal loan or paying with a credit card due to the fact that there are minimal set up costs."

  • Rizflip on 01/04/2017 - 19:20
    +1

    Toyota is trying to clear their locally made Camry stock hence the pricing/finance deal. 0% in principal sounds good but once you factor in the establishment (quite high with some loans) and on-going fees, its not that great. Look at your other options in terms of financing. Home loan might also be a better option and you can use online calculators to see what would work for you when comparing it to this 0% finance deal.

    • Major Packer on 05/04/2017 - 13:06

      There are no establishment and on-going fee. The only fee is the $6.80 as I mentioned. But you were right about they are trying to clear the locally made stock.

  • godofpizza on 05/04/2017 - 11:19
    +1

    the Camry will be only worth about 12K-14 in about 4 years time. if you brought the corolla instead it might hold it's value marginally better.

    • Major Packer on 05/04/2017 - 11:27

      How much does a 4 year Corolla worth?

      • godofpizza on 05/04/2017 - 11:48

        about 10% more check carsales for examples in your area

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