Automotive Loans: Dealer Incentives to Buy

by Amy Lillard

(1/21/2013) When buying a car, consumers often have a few special deals to choose from, including “cash-back” rebates, lower financing deals, or even special government offers. But what many car buyers don’t know about are incentives offered only to car dealers, which can directly affected the purchase price. Savvy buyers can use them lower their cost and create a better financing deal.

These types of incentives are offered by manufacturers to increase sales on specific models of cars. They reduce the cost of the vehicle from the factory, or offer some other form of cash incentive to sell a certain type of car. This often happens when a new year model is coming out and last year’s model must be moved. It can also happen in order to sell relatively unpopular cars, or those that have simply been on the lot for a long time.

The result is dealers competing to sell certain cars — for each qualifying vehicle they receive a cash payment. Dealers try harder to sell these cars, which may passing savings on to the buyer in the form of rebates and other deals. Or it may simply mean they are more open to negotiation.

Ultimately, since dealer incentives motivate them to sell certain cars, if you know about a dealer incentive you may be able to negotiate with more confidence. You could end up with a lower purchase price, reducing the amount you pay upfront and over the life of your auto loan.

It can be difficult to know which dealer incentives are offered to which dealers. Local and regional rules will mean different incentives for different areas, and for different dealers. However, looking at aggregates like the national incentives listed at Cars.com can indicate which incentives may potentially affect your local dealers.

Putting some time in to research all the incentives available to you, including the publicized consumer rebates and other deals, and the incentives available only to dealers, can put you in a much stronger position when buying your next car.

For Additional Reading:

Five Factory Dealer Incentives That Can Save You Tons of Money: http://www.carsdirect.com/car-buying/5-factory-dealer-incentives-that-can-save-you-tons-of-money

Dealer Incentives:
http://www.tips4carbuying.com/new-car/dealer-incentives.html

A frequent contributor to ERATE® since 2006, Amy Lillard is a freelance writer specializing in turning complex information into useful tips and tricks for readers. For questions or topic suggestions, contact Amy at [email protected].

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