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Finding the Best Auto Incentives and Rebates
In order to pique interest in their current model line, to boost sales and move excess inventory, many automotive manufacturers and their dealers offer incentives and rebates. Often the incentive will either be direct cash back to the customer or it will be offered as a lower rate in financing. If both are offered, the buyer must choose one or the other.
Manufacturer rebates are passed on directly to the customer. However, dealer incentives are sent directly to the dealer, and it is their choice to pass the savings on to the buyer. At times, the dealer may not even be aware of the dealer incentive. Speaking directly to the sales manager and asking about the automotive incentive programs the dealership is participating in can save you cash. Also, researching regional and national promotions could help bring your new car price down.
Here you will learn in detail about auto incentives and rebates offered by auto dealers, and what you should do when faced with choices.
Auto incentives and rebates are programs offered by the automotive manufacturers to increase sales. The three most common programs you are likely to encounter are in the forms of cash rebates, low interest financing, and leasing specials. Some auto manufacturers also provide first time buyer, military, and other programs to target specific customer segments. Manufacturers also provide marketing support directly to dealers, (which may or may not be passed on to consumers.) The most common type of program is a dealer cash incentive.
Cash
Incentives and Rebates (Cash Rebates)
An incentive is a price reduction extended by the auto factories
in order to increase sales on new models, or to slim down the excess
inventory of older models. Incentives can be offered as straight cash
back, a lower financing rate, or a combination of both. The amount of
the incentive can vary, depending on the model and the manufacturer,
starting at $500 and going upwards of $2000. Obviously, the more expensive
the car, the bigger the auto incentive will be.
Incentives can be tricky, however. Some can be passed directly to the customer, and some go to the dealer, who has the option of passing it along to the customer. Again, asking the sales manager about the incentives being offered regionally and nationally can better ensure that the savings will get passed to you rather than end up in the dealer's pocket.
Low-Interest
Financing
Another form of auto incentives and rebates is a low interest financing.
This is a lower subsidized finance rate offered by the auto manufacture's
finance company. Eligibility is limited based on the customer's credit
worthiness (FICO score).
Leasing
Specials
Offered by the auto manufacturer to increase sales by lowering the customer's
monthly payment by subsidizing the vehicle's Residual Value or Money
Factor.
Customer
Incentives
Customer incentives are usually incentives that are more heavily advertised
than other incentives. They normally come as an option of either reduced
financing or cash, or a combination of both. They may also cater to
specific groups: seniors, repeat customers, college graduates, first-time
buyers, etc.
Dealer
Cash Incentives
Normally paid to the dealers by the auto manufacturers to support the
sales of a specific model line or trim.. There are lots of variations
of incentives but the most common dealer cash incentive is where the
dealer receives a cash credit (fromt he auto manufacturer) upon the
sale of a car. Sometimes dealers earn cash bonuses when they achieve
sales volume targets. There are also programs where a dealer earns the
incentive upon purchasing a vehicle from the manufacturer.
