Wave a Solemn Goodbye to Cheap 84-month Loans, Shoppers

Steph Willems
by Steph Willems

They’re still out there, just not in the same concentration as before. Two weeks after the U.S. auto industry restarted production in force, long-term, no-interest loans are becoming as hard to find as Lysol wipes.

At General Motors, which wooed many a truck buyer with zero-percent/84-month financing during the coronavirus lockdown, the good times seem to be over for buyers. However, some lucky individuals might be saved by timing.

As reported by CarsDirect, dealer incentive bulletins show the 0%/84 month bonanza is over at Chevrolet, GMC, and Buick. Going into effect Tuesday, the new June offers show only a zero-percent/72-month offer for those looking to get into a new Silverado, say, with the lowest possible monthly payments.

Full-size pickup sales never fell more than 25 percent below pre-virus estimates during the depths of the lockdown, leading to dwindling pickup inventory as plants remained shuttered. GM, Ford, and Fiat Chrysler restarted production May 18th, with GM ramping up truck output this week. Dealers are hungry for new stock. Buyers, on the other hand, will be forced to pay more.

That said, the 4-month payment deferral GM touted during the lockdown is still a thing — just not for buyers seeking zero-percent loans. Bummer. However, for those who started the buying process before June 2nd, GM will honor its previous offer.

Lease offers appear unaffected by the June change-up, so there’s the possibility of scoring a good deal there.

Elsewhere in the industry, Hyundai has scrapped its zero-percent/84-month offers, while Ford has deep-sixed its 120-day payment deferral.

Nature is healing.

[Image: © 2020 Chris Tonn/TTAC]

Steph Willems
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  • SCE to AUX SCE to AUX on Jun 03, 2020

    84-month loans are sought by people who can't afford a 48- or 60-month loan, which means even 0% loans are a risk for the bank. Adding some interest back into them isn't a bad thing. Unfortunately, offering such loans on the most expensive vehicles only compounds the problem for banks and consumers alike.

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    • Arthur Dailey Arthur Dailey on Jun 04, 2020

      @krhodes1 Agree with using your calculator in advance. I negotiated a price on a vehicle from a manufacturer offering 0% for 7 years. The car came with a 5 year, 100k warranty. So I knew it would be out of warranty early in my 5th year of ownership. I went in knowing my maximum budget both overall and for monthly payments. And refused any suggestions to pay just a bit more for a higher end model or more options. The car is now in year 9 and may be worth $1k as a trade. But I took the money that I could have spent to pay it down sooner and invested it in the kids' RESPs (to which the government makes an automatic 20% matching contribution) and in my RSP for my retirement. Which then triggered a considerable tax refund. The RESP has since been cashed to pay for kids' education and the RSP is still invested in safe investments, growing slowly for my retirement. If I had made a large downpayment on the car or paid it off in 3 or 4 years, I would not have had the same amount of cash to make these investments. Having cost all my cars since 1987 on a per mile/km basis, I have come to the conclusion that unless acquiring a RAV4 or CR-V new at a good price and rate (highly improbable), that it is less expensive per mile in my situation, to lease a similar type of vehicle from a manufacturer more willing to 'deal'.

  • Socalduck Socalduck on Jun 03, 2020

    Where people get into trouble is when they rollover the unpaid balance from the 60 month note on their old vehicle into the 84 month note for the new ride. And then five years from now, they do it again on the next purchase. Most new car buyers will not hang on to a vehicle for the full 84 months.

  • Tele Vision Tele Vision on Jun 03, 2020

    I just bought a 2000 GMC Sierra last weekend for our oldest boy. It has the 4.8L and a 4L60E sending torque to a factory LSD rear with 4:10 gears in it. CDN$1500.00 It runs as sweet as a nut and can be fixed with a socket set and a hammer. My point is: Old Is Still Good, And It's Easier To Fix. I've been buying used cars and maintaining them for 25 years. It's fun; cheap; instructive; and, if you're into it as a 'thing', good for the environment. Pay cash for the car and the tools and you're ahead of the game.

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    • Jalop1991 Jalop1991 on Jun 04, 2020

      @ktm I'm too poor to buy cheap. That being said, you don't have to be rich to own a cheap used Corolla. You DO have to leave your pride at the door, maybe, and not care about what anyone else thinks and not care that you didn't (foolishly) pull the trigger on that $50K Genesis just so you could have something to talk about on anonymous web forums.

  • Carrera Carrera on Jun 03, 2020

    My personal rule with financing a vehicle is 60 months maximum. If the payment isn't comfortable for a 60 months loans, that means I can't afford the vehicle. Normally, I never put down more than 10-15%. The issue with these 72-84 term loans, in my opinion, is that more than likely, but not always, they're offered in vehicles that depreciate faster than others. When I buy a vehicle I like to buy with the intention to keep it 7-10 years. Well, that's the intention but doesn't always work that way. I always like to keep in mind the "what if" scenario. What if I am not into pick up trucks anymore after 3 years of payments on my 84 month loan? How much upside down am I going to be? Probably a lot unless it is a Tacoma or a Tundra and even then. How about if I get over my midlife crisis and after 2 years I realize that I hate rolling out of my Corvette? How much upside down am I going to be on that 84 month loan? It hasn't happened to me yet since the above scenarios are just that.."what ifs" but I've worked with plenty of guys and gals who did exactly what I just used as an example. Sometimes, the trade-in was "just because", but often times it was out of necessity such as life changing events ( health issues, twins on the way, marriage, divorce). Life can change in an instant and the last thing I want to worry about is my $7,000 upside down loan being rolled over into my next car. Since I can't afford to buy a new car cash, for now, I find the 60 month loan to be the sweet(er) spot.

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    • Scoutdude Scoutdude on Jun 06, 2020

      A full size pickup, in a popular configuration has some of the lowest depreciation out there. Yeah you'll be screwed if you bought a 2wd or a regular cab in my area, but 1/2 ton 4x4 crew cabs are like gold around here. Yeah you'll be upside down at the start, but you are with any 10-15% down loan. However the 0% means all of the payment goes to principal. So you still make ground on the depreciation front and will be in the green sometime in year two, three at the latest. So two options that are better than locking yourself into the higher payment of a 60 month loan. Take the 0% interest and pay extra every month so that it will be paid off in 60 months. That way if things get a little lean one month you can stop paying that extra. Or take that extra money, put it in savings and don't touch it. You will be making more than 0% and you'll build up some cash. That cash could be used if things get tight or to make up the difference if you do find yourself upside down and need to make a change. Seriously, the 84 month 0% loan can be a good financial decision, if you don't use it to take home a more expensive vehicle than you would have otherwise. Of course I expect the majority of people do it to be able to take home a more expensive vehicle.