[Craig T]

Originally Posted by Shadetree930

A 0% auto loan is not always living above your means. Even a 2.9% loan may make sense depending on portfolio return rates.
It is a good use of other people's capital as long as you can cover the debt liability with cash if the need arises.

I don't disagree with that Shadetree930. I was emphasizing the avoidance of paying loan "interest" on a depreciating asset, like a car. A 0% auto loan is more like a scheduled deferment of the purchase price with the seller holding the car's title as security.

I think a 0% loan would make good financial sense if someone had the cash to buy the car, elected to go with a 48 month 0%, then put money equal to the car's purchase price in a solid investment over that 48 month period (or longer).

If a person has little savings, and maybe some credit card debt, than I still don't think buying a car on 0% payments is such a great idea. At two years, the balance on the 0% could still be more than the value of the car. If the person defaulted on the 0% loan, and the car was repo'd or turned in, that inequity, plus service charges, would still be put on your credit file as debt accumulating interest.