Question
In today's world you can often buy a car with a zero interest rate if you take a loan directly from the car manufacturer. This
In today's world you can often buy a car with a zero interest rate if you take a loan directly from the car manufacturer. This means that the car company is not making money on the cost of the car loan. Yet, the car company still makes money even though you borrow the total cost of the car over a three or five year period. How does the car company make any money on this type of loan?
Question 3 options:
The company makes money not on the loan but on the difference between the company's manufacturing cost and the sales price. | |
The company records a loss on the sale of the car and then passes that on to dealers who make up the difference (loss) by charging more for regular scheduled tune ups. | |
The company makes money on the loan by remarking the interest rate up for accounting purposes. | |
The company does not make money but they make up the difference in volume. |
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