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Rebates & Incentives
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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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