You’re probably asking the wrong person. I always think it’s better to buy a car for cash — if you can afford to do so. You’re not passing up so much in interest by leaving the money in the bank. And if you are a cash buyer you can always ask for a lower price on the car! After all, the dealership isn’t “giving away” free money. They’re making money on this deal by the enticing zero-rate offer.
So give it a try: Negotiate the price on the 0% offer (after checking for realistic prices on KBB.com) and then walk away. When the salesman follows suggest you give him/her cash instead of financing — in exchange for another $500 off the price. They’ll probably be willing to compromise for maybe a $300 discount for cash — and there’s the interest you would have earned on the money if left in the bank for the next 3 years!