You're not giving them free money, you're getting them to pay you a lot more in total over many years by selling them a much more expensive vehicle up front. Instead of, say, $20k over 3 years, they can get $40k+ over 7 years for selling a product that doesn't remotely cost them twice as much to build. It's more profit for them.

These 0% 7 year loans are not coming from banks. They're coming from the car companies. They're a sales tool.

If you take the 0% financing, you miss out on the $4,500 "customer cash" discount. They're just moving numbers around.

The dealerships are making their money with various add-on packages now, to try to bump up the sale price. It isn't even in your favour to offer cash in most cases.

Talk to the federal reserve.