Is it worth paying the reaminder of my car loan off?
I got my car (2020 Ford Fusion Hybrid SE) new 3 years ago at $25k for a 6 year loan @ 0% interest for entirety of loan, $350 a month payment. I'm about halfway paid off and have about $12.5k left on it. What should I do? I just get sick of paying $350 a month.
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Setting aside the talk about interest, etc., I would double check the terms of your loan.
Almost no lending institution is going to give you $25k at 0% for the life of the loan. They wouldn't be making any money. In fact, servicing the loan (taking payments, etc.) would cost them money.
Are you sure it's for the life of the loan?
Car loans are very frequently extremely low interest rates when financed through the dealership. I personally have a 0.99% car loan.
The days of the 0% for X months financing are coming rapidly to an end as inflation and the federal reserve interest rate both go up. But even those loans, while they incentivize the buyer to pay the loan off early, will still apply interesting -- sometimes, if you're not careful, all the deferred interest for the past X months, which is extra shitty -- after the 0% period is complete. I think the only major manufacturer this season that's offering any sort of 0% deal is NIssan, and they're sort of going all in, probably in an attempt to move excess inventory.
It's just not a thing to see a lender not charge interest. It's like, going to Taco Bell and ordering a burrito for $0.
There are, of course, some exceptions. The dealer may be subsidizing the interest payments. The lender/servicer may be pulling some (probably) illegal shit and calling "interest" a "service fee" or are perhaps charging a "payment processing convenience fee" to make their money. The dealer / automaker may be paying the servicer's bills on the backend, but don't think for a moment that cost isn't baked into the sale price of the vehicle. I just can't see a case where a lender would be okay working for free.
I think it gives them value as a sales tactic. Plenty of people get cars they can't afford to pay for upfront, and may be a little outside a sensible budget for payments too. But if they see a 0% loan for 48 months... "what a great deal"... boom that's another car sold
Captive finance companies do this all the time because they make money on the margin of the product. The financing is just an incentive to get up to purchase the product.