Rebates & Incentives
Glossary of Incentives:
1. Cash back - a cash amount that is subtracted from MSRP
2. Financing - an interest rate that is offered as part of financing the vehicle through an OEM specified institution. Usually based on MSRP minus trade-in and down payment.
3. Combination - a hybrid of cash back and financing.
4. Gift Certificate - a gift certificate to a local retailer, e.g. Home Depot. Often can be taken as additional cash back.
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Rebates and incentives are your first clue that you’re on the trail to some good deals and money-saving opportunities. Nevertheless, your chances are slim to none in finding a rebate or incentive on a faddish or rare care like a Mini or Toyota Prius.
So what is the auto manufacturer’s mindset in doling out their rebates and incentives to the consumer? It’s simple: bargaining. Dealers get these cars at a lower cost than you do. Naturally they need to make a profit. As a consumer you can benefit from discounts that the dealer won’t care about one way or another. Insist on the rebates and incentives as a discount on the ticket price of your car.
An incentive is bait to get consumers to buy their cars now and not tomorrow. These come in the form of really low interest rates. But there’s always a hook that you must be mindful of. Watch for hidden fees, fine print and expirations.
A rebate is a sum of money returned to you by the car’s manufacturer after the purchase. If you are financing your car, remember not to finance the amount of the rebate; otherwise, you’ll be paying for the rebate for the life of your loan. Dealers also can receive additional rebates that are not disclosed to consumers. If you learn of a dealer rebate, you can use this as a bargaining tool to bring down your cost.
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