Year-end sales events: what they're worth

"0% APR for 72 months on select models!"

Zero-percent financing is real money: no finance charge at all. The conditions do the filtering. "Select models" is usually a short list. The best terms typically go to applicants with strong credit, and the ad's fine print generally says as much. And the zero-percent offer is frequently an alternative to a cash rebate rather than an addition to it, so taking one can mean giving up the other.

That last point is worth pricing out. On an illustrative $30,000 car over 60 months:

With a $3,000 rebate, zero percent wins by about $1,319. With $5,000, the rebate wins by about $1,001. The 6% is an arbitrary illustration; plug in whatever rate you'd actually be offered elsewhere, and do this arithmetic before choosing, not after.

"Up to $5,000 cash back!"

"Up to" means the maximum, on whichever vehicle or configuration qualifies. Your car may carry less, or stack several smaller programs that each have their own eligibility rules. Rebates are real, but they come off the price, so they are only worth something if the price they come off has been negotiated first. A $3,000 rebate on a car you overpaid for by $3,000 is a wash dressed up as a gift.

"Employee pricing for everyone!"

This sets a specific price, which can be useful: it gives you a published number to hold the dealer to. Whether it is a good price is a separate question. Compare it with what the same car is going for elsewhere. The phrase implies an insider's bargain; what it delivers is a figure you still need to check.

"We'll pay off your trade, no matter what you owe!"

The dealer will indeed send a check to your lender. If you owe more than the trade is worth, though, the difference doesn't vanish; it is usually added to the new loan. You end up financing the old car and the new one together. The FTC has warned consumers about exactly this kind of promise. We trace that carried-over balance across three cars in a separate piece on negative equity.

"$0 due at signing!"

Nothing due today generally means everything due later. Fees, first payment, taxes: on a lease or a loan they're rolled into the amount financed, raising the payment and, on a loan, adding interest. It can be the right choice when cash is tight. It is never free. Ask for the total of payments with and without the offer and compare.

"Prices this low won't last. Ends December 31!"

Specific programs do expire. Sales events, in general, recur: there is usually another one close behind. The deadline's real job is to shorten the time you spend comparing, and comparison is where most buyers save money. If the deal is good on December 29th, it will usually still look good after one more evening with a calculator.

"Every car must go! Clearing the lot for next year."

The mechanism is real. When the next model year is arriving, the outgoing year's cars can become harder to sell at full price, and a dealer may prefer a smaller margin to another month of carrying them. The catch is on the other side: a leftover model is a year older on paper from the day you buy it, which tends to show up when you sell. Worth it if you keep cars a long time; less so if you trade often. More on the calendar in when in the year cars cost less.