More affordable monthly payments – driven by low interest rates and longer loan amortizations – have been an important tailwind to record-setting new vehicle sales volumes. Zero-per-cent interest financing offers have become fairly common, but in most cases such offers are typically available for loan terms of 60 months or less. According to a recent study by J.D. Power, the average auto loan term is far longer, with 55 per cent of new-vehicle loans having a term of 84 months or more. As such, we've highlighted some noteworthy deals that all feature zero-per-cent financing offers for up to 84 months, in addition to strong cash purchase and lease incentives.
It is important to note not all zero-per-cent-financing offers are equally attractive and some can actually end up costing you more money. In some instances, auto makers may offer large cash incentives that cannot be combined with zero-per-cent financing (referred to as a "non-stackable" cash rebate). Depending on the size of the non-stackable rebate, vehicle price and loan term, it may be wiser to forgo the zero-per-cent offer and arrange separate financing.
To illustrate such case, the interest paid on a loan for a $35,000 before-tax vehicle amortized over 84 months at 3.99 per cent is $5,845. It would be worth forgoing a zero-per-cent-financing offer in such case if there was an additional non-stackable cash rebate available worth more than $5,845 (which would make up for the interest incurred and potentially save you more).
Here are our favourite deals this week along with tips on how to best finance for maximum savings:
2017 Mitsubishi Mirage
Standard equipment on this budget-friendly hatchback includes remote keyless entry, steering-wheel-mounted audio controls and a 140-watt sound system with CD and MP3 playback capabilities. The Mirage is backed by Mitsubishi’s 10-year/160,000-kilometre powertrain limited warranty. Cash purchasers can take advantage of a $1,000 incentive, while finance customers qualify for zero interest for up to 84 months and a three-month payment deferral during the “No Payments for Up to 90 Days” promotion. Mitsubishi’s zero-per-cent-financing offer will save you more than taking the non-stackable cash rebate and financing at 3.99-per-cent interest (available from most major banks).
2017 Mitsubishi Mirage SE CVT
- MSRP: $17,398
- Manufacturer incentive: $1,000
- Estimated dealer discount: $250
- Freight, PDI, government fees: $1,590
- Cash purchase price before tax: $17,738
- Finance for 84 months at zero interest for $252 a month including tax (assumes zero down payment)
- Lease for 48 months at 1.99-per-cent interest for $328 a month including tax (assumes a 20,000 annual-kilometre allowance and zero down payment)
2017 Chrysler Pacifica
Standard features include Chrysler’s Uconnect multimedia system with 5.0-inch display, Keyless Enter ’n Go with driver-door-proximity entry, as well as second- and third-row Stow ’n Go seating. Additionally, cash purchase, finance and lease customers can all benefit from a $1,500 after-tax incentive. Customers who opt to finance can take advantage of zero interest for up to 84 months and a 90-day payment deferral during the “No Payments for 90 Days” promotion. Chrysler’s zero-per-cent-financing offer will save you more than arranging separate bank financing as the same cash rebate is available regardless of cash purchase, finance or lease.
2017 Chrysler Pacifica Touring
- MSRP: $39,995
- Manufacturer incentive: $1,500 (after tax)
- Estimated dealer discount: $750
- Freight, PDI, government fees: $1,935
- Cash purchase price before tax: $39,680
- Finance for 84 months at zero interest (as compared with 1.99 per cent in January) for $536 a month including tax (includes a $1,500 after-tax incentive and assumes zero down payment)
- Lease for 48 months at zero interest for $576 a month including tax (includes a $1,500 incentive, assumes an 18,000 annual-kilometre allowance and zero down payment)
2017 Mazda5
Featuring dual rear sliding doors, fold-flat second- and third-row seats and seating for six, the 2017 Mazda5 offers the versatility of a conventional minivan without compromising the driving experience of a sedan. Cash-purchase customers benefit from a $3,550 incentive, while finance and lease customers qualify for zero interest. Additionally, all customers will be eligible for a $500 winter-accessory credit toward Mazda parts or accessories. Those needing to finance should consider opting for the $3,550 non-stackable cash rebate and arranging bank financing at 3.99 per cent to save more.
2017 Mazda5 GS Automatic
- MSRP: $23,195
- Manufacturer incentive: $3,550
- Estimated dealer discount: $500
- Freight, PDI, government fees: $2,035
- Cash purchase price before tax: $21,180
- Finance for 84 months at zero interest and zero rebate for $333 a month including tax, or alternatively at 3.99-per-cent interest and $3,550 rebate for $327 a month including tax (both assume zero down payment)
- Lease for 48 months at zero interest for $368 a month including tax (assumes a 20,000 annual-kilometre allowance and zero down payment)
2017 Buick Verano
Standard equipment includes OnStar with 4G LTE and built-in WiFi hotspot, chrome mouldings and exhaust tips, as well as a StabiliTrak system, which assists drivers in maintaining vehicle control in low-traction conditions. Cash purchasers can now take advantage of a $5,500 incentive, while finance customers are eligible for a $1,500 rebate and lease customers qualify for a $2,750 rebate. Those needing to finance should consider opting for the larger $5,550 non-stackable cash rebate and arranging bank financing at 3.99 per cent.
2017 Buick Verano Front Wheel Drive Sedan
- MSRP: $24,190
- Manufacturer incentive: $5,500
- Estimated dealer discount: $750
- Freight, PDI, government fees: $1,982
- Cash purchase price before tax: $19,922
- Finance for 84 months at zero interest and $1,500 rebate for $323 a month including tax, or alternatively at 3.99-per-cent interest and $5,500 rebate for $308 a month including tax (both assume zero down payment)
- Lease for 48 months at zero interest for $296 a month including tax (includes a $2,750 incentive, assumes a 20,000 annual kilometre allowance and zero down payment)
Andrew Tai is CEO of Unhaggle.
Manufacturer incentives and pricing calculations are based on Ontario customers and subject to availability of inventory. Dealer discounts shown are estimates for illustrative purposes only, may vary by region and are given at the discretion of individual dealers. Please note that while every effort is made to ensure the information above is accurate at the time of publication, pricing, incentives and discounts are subject to change or discontinuation at any time. Consult your local dealership for details.