ELI5-How do banks make money when they offer 0% financing on vehicles?

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ELI5-How do banks make money when they offer 0% financing on vehicles?

In: Economics

8 Answers

Anonymous 0 Comments

The auto manufacturer (Ford, GM, Toyota) will subsidize the interest, as long as the dealer can get a rate under 3% or a similar number. This is done when the manufacturer wants to get more inventory out, either because they overproduced or they are trying to expand their customer base.

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