> Interest rates (such as "0% APR") that are artificially lower than prevailing market rates means the missing extra interest is embedded in the sales amount in the form of a higher price. TNSTAAFL.

A more accurate way of saying this is that the dealer is using incentive money to buy points (as is available in the mortgage market). You can ask dealer to apply that to the price of the vehicle instead. Many dealers already offer that kind of choice in their advertisements already (cash bank or no interest financing). Which way works out better for you depends on the terms of the loan etc. It's all the same to the dealer though.

With below-market interest rates (0%, 1.99%, etc.) it’s almost always the manufacturer that is buying the points (if you want to look at it that way), not the dealer. Therefore, the dealer has no incentive to give you a cash discount in lieu of the lower rate, unless the manufacturer itself offers that trade off (which as pointed out, they sometimes do, but often do not).

This is a good sub thread for a lot of people buying a car, who haven't before.

Another trick in the industry, is the "price the dealer pays". This is mischievous, as the dealer does indeed pay that price for the car. However, they receive incentives quite often, in terms of kickbacks for sales made. So they dealer can gleefully say "This is what we paid for the car", whilst in parallel not indicate "Well, we received $5k as a kickback from the manufacturer later".

The manufacturer often also has monthly blitzes, discounts of the month, which the dealer will not really inform you of. After all, that's extra profit if they can trick you into paying full price.

In the early days of the internet, there used to be excellent services to discover all the discounts the dealers had, so you could a proper assessment of their actual cost. Thus, you'd be able to haggle with both eyes open.

For Canadians, The Automobile Protection Association (APA), https://apa.ca/ is legit, and offers such a service for a fee. Not sure what Americans might have. Or who to trust there.

Knowing what the car actually costs the dealer, is immense power when negotiating.

Yes the incentives I mentioned come from the manufacturer. My experience has been it's cash back (to the buyer via the incentive) or the special finance rate. For my last loan it worked out better to take the cash back so that's what I did.

Sure, but that's actually not necessarily the norm. Or even when a cash option is offered, its much less than the value of the below-market financing (like $1K-$2K vs. a 3% below market interest rate on a $50K car which is worth closer to $4K).

Dealer margins on initial sales aren't huge, usually, and there are times when 0% financing is simply a way to get things off of lots even at a loss so a car with better margins can replace it, but either way dealers don't really care because the margins on service are massive.