You’re eager to buy a car but you aren’t as eager about the process. Somehow, you’re worried that “the other guy” will always talk themselves into a better deal. But there’s an equalizer, a way to get a leg up, that doesn’t depend on your negotiating prowess. And that’s through incentives and rebates. Oh, you’ve heard of them, but you have no idea how they work, really. So, here’s what you need to know about how to use new car incentives.
What Are Incentives?
Let’s start there. An automotive manufacturer offers these to lure customers to them – and away from rivals – or to promote loyalty to a brand. Automakers also employ incentives when a model’s sales are flagging, and they want to make some sales. Seriously, you can potentially save significant bank if you know what to do with incentives.
And just how do incentives look? They’re usually either cash rebates, low APR financing, or special lease deals. Sometimes, carmakers extend extra incentives to certain groups, such as members of the military.
Why Are They Important?
Automotive companies know that, if all other things are relatively equal, an incentive could make the difference between gaining a sale and losing one to the competition. For example, there may be two vehicles you’re interested in that have the same sticker price, but if one has a $2,000 cash rebate, there’s a good chance you’ll go with that one.
How Long Do Incentive Programs Last?
That’s the thing: because automakers can switch or even drop certain incentive programs at any time, you risk losing out if you don’t jump on one that you like. Sites such as Edmunds have the latest national and local promotions, so you can track Jeep incentives there.
Can You Tell Me More About Types of Incentives?
Yes. Here’s a brief description of the kinds of incentives out there:
- Customer Cash. This is a form of rebate. Also widely known as bonus cash, customer cash is usually applied to the car price or to the finance price of a lease, although customers can choose to pocket the cash. This is usually the better deal, since you’re financing a smaller amount. Customers must often qualify for such rebates, as there are requirements. For example, if you’re looking for a loyalty bonus, you must show evidence that you own a ride of the same make as the one they’re looking to purchase. Some manufacturers require you to finance your car through an in-house finance company.
- Low APR Financing. Here, the automaker offers interest rates that range from zero to around 5 percent. The caveat here, though, is that excellent credit is required. That’s why it’s a good idea for you to get preapproved for a vehicle loan so that you can have a comparison APR as well as an “ace in the hole” in case they don’t qualify for the low APR deal. Also, know that the low rates are often linked to the loan’s length, something you need to pay attention to.
- Special Leases. Also called lease deals or lease specials, these are often offered by manufacturers through their “captive” finance companies, meaning those that they control. Usually listed as subsidized leases, they’re generally based on a car’s residual value that’s more than the vehicle’s value at the lease’s end. In any case, with such leases, you often need little to no money down. Just make sure you get the dealer to give you what the advertised special calls for.
Now that you know what you need to about how to use new car incentives, you can get the best deal possible on the ride of your choosing. In fact, you stand to save a lot of money if you do it right.