I have often wondered how banks and finance companies could afford 0% financing. I always thought that those with awesome credit benefited off the backs of the Joe Schmoe's of the world. While that may be somewhat true, it's not the case where I work. We offer 0% financing but the finance company charges us 15% in order to charge 0%. This causes us to add 15% into the sell price of our product. This is happening everywhere. If you have a loan at 0% for 5 years, chances are you paid the interest up front. Clever marketing indeed.
Convenience has a price, and most people are more than happy to pay it. I've recently been in an automation craze, and my wife decided to join in by signing us up for all kinds of stupid ****, the most notable being some company that delivers a new toothbrush head and toothpaste every 3 months. It costs $30 a shipment, which is absolutely outrageous, because, you know, toothpaste is like $4 for a 3 month supply, but we don't have to go to the store anymore.
When I bought our current car, the dealership offered 0% financing. So I told the salesman that if they would discount the price to account for the interest, we would pay full price for cash "today". He declined. He said you could pay the price for cash, or you could take the 0% financing. We took the financing. But their game is that you have to watch the obligation carefully and miss no payments. If you miss any the total comes due immediately, and if you missed a payment you probably can't pay the total that is suddenly due, so they come a repossess your car and resell it.
