New Car Rebates and Incentives
Buying a new car? Look for those rebates and incentives.
It may be a “buyer’s market,” but you still need to be prepared with all the information available to be able to negotiate your best deal. It is relatively simple today to find out the invoice price on a new car. But that in itself does not tell you the whole story. To negotiate the best price you need additional information.
For example, there are all kinds of rebates being offered by manufacturers today which are attached to most new cars, except perhaps for a few of the harder to get, high end, luxury models. These are the national rebates. But there are also regional rebates that manufacturers use to promote sales in a particular geographic area, Although given the current economy there are likely regional rebates throughout the entire nation. In addition, there are also particular rebates which are aimed toward specific customer groups such as loyalty rewards to try to keep customers from going to another brand. There may also be rebates for first-time buyers, military personnel on active duty, college students, and even incentives or at least a financial cushion for those who may become unemployed during the first year of the contract.
These rebates can easily be located on websites such as AutoBytel, Cars Direct, Edmonds, Kelly Blue Book, cars.com, and others. In addition current manufacturer rebate programs are also listed in the weekly industry newspaper Automotive News.
You should also be aware that manufacturers provide incentives to their dealers to achieve certain sales goals which are not made public as are rebates. Typically, auto manufacturers will offer a 2% to 3% of the invoice price incentive to the dealer (the “holdout”) to reduce the dealer’s cost. It is important to take this dealer’s discount into consideration when negotiating for a new car. Consumer Reports New Car Price Service provides the invoice price, dealer incentives, and rebates for most cars. There is also a website called Fighting Chance which provides other information to help in your negotiations.
By taking all these factors into consideration to determine the true cost that a dealer is really paying for a vehicle, it will be much easier for you to negotiate a price that is both affordable to you and still allows some reasonable profit for the dealership.Therefore, you should start with the dealer’s invoice price, deduct the “holdout” to get the true dealer cost, then apply any rebates or other incentives, and negotiate up from there.
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