I see that Ally is again doing 0% APR financing for 5 years on a new 2013 Cadillac. This is the offer that I took advantage of exactly 1 year ago when I purchased my 2012 SRX. How can they afford to do this? Do they really make any money this way? Someone please explain how this works.
Discounts occur at both ends. Dealer will take discount off MSRP at his end, and will lose some profit to make the sale, but still makes profit. Discount will vary from person to person, depending on negotiating skills.
GM/Ally ("head office") gives discount to the dealer which is then passed on to the buyer, done as advertized discounts for everyone. GM only gives either cash discount (sometimes large), or discounted interest rate. But not both at same time. Discount given by GM/Ally still leaves them profit above their manufacture cost.