It is not that the automakers are just being nice, they want the dealers to re-order inventory, which is how auto manufacturers make their money.
First and foremost, you should remember that factory incentives are your money and the dealer wants you to have every available incentive you qualify for, that makes their job easier to help you purchase a car.
All rebates come from the auto manufacturers direct to you, but the dealers administer them for your convenience. You should think of factory rebate dollars as cash, because that is what they are. One big issue for dealers today is making sure you get all the incentives and rebates possible. If they leave you with a price and miss an available rebate, it puts the dealer at a big disadvantage if you shop their price, and the competition picks up on a factory offer. Many of the carmakers are big into sending you private offers.
These are real offers, but generally have a time limit on them, so read them carefully. Even when it's the government offering the rebate, the reason and the effect is the same: The government wants to increase sales of a particular model and consumers save money in the process.
Currently, the government offers rebates to some consumers who buy hybrid and alternative fuel cars. The rebates are given because the government wants to encourage people to buy this form of technology.
The idea is that if more people drove hybrid or alternative fuel cars, the country would use less gas and we'd ultimately have less air pollution, too. However, while most rebates on cars are applied directly to the purchase price, the government rebates on hybrid and alternative-fuel cars are applied for through the state or local government after the car is purchased.
Most dealers can help you do that, however, so the process is pretty easy and you save money. While rebates on hybrid and alternative fuel cars vary by state, the federal government offers tax credits on some hybrid and alternative fuel car purchases.
While that doesn't directly bring down the cost of the car, it still means a net savings for the year, since your federal tax bill will be reduced. Rebates aren't the only way to save money when buying a car. Car makers and dealers offer lots of new car incentives beyond rebates. One of the most common offerings is low-interest financing. When low-interest financing is an option, that means that dealers and manufacturers have partnered with lenders to offer special loans to buyers of a particular vehicle.
Many times, those loans are for zero-percent interest. Since most people have to borrow money to buy a new car, being able to borrow money at zero-percent interest is a big savings.
That's because when you borrow money, the interest rate is extra money you have to pay back on top of the money you borrow. In effect, having interest on a loan increases the car's price. However, with zero-percent interest, that extra money is removed. Usually, consumers are offered a choice between low-interest financing and a cash-back rebate.
It's rare that you can take advantage of both. Before you decide which option is the better deal for you, figure out how much money you'll save in the end with low-interest financing. It may end up being more than the cash back rebate. Other new car incentives you can take advantage of are special leases, where the monthly lease payment is reduced or the money due at signing is reduced. Sometimes dealers will even offer other incentives, like free maintenance or free options like a free DVD entertainment system on the car.
Financing Incentives A rebate is just one type of car buyer incentive. Qualifying for an Incentive The factors that determine whether you qualify for a rebate or incentive depend on the manufacturer.
Other Types of Rebates In addition to the common cash rebate, Lending Tree notes that car buyers can also take advantage of other, less common rebate types. If you buy the same car brand you've already purchased in the past, ask the dealer if you can qualify for a loyalty rebate. If you are thinking about switching to a new brand after an issue with your tried and true manufacturer, ask the new manufacturer about a conquest rebate.
This incentive is designed to encourage car buyers to switch to a less familiar brand and typically applies if you own a newer model vehicle from a competitor. Military rebates are a common incentive for families who have a household member who serves or previously served in the U. In most cases, these incentives are good for up to two years after the member's end of service date, but different manufacturers have different rules for qualification.
For example, Kia extends this program to any service member who received an honorable discharge, no matter how long ago he or she served. To qualify for a rebate of this kind, the service member should bring his or her DD or Leave and Earnings Statement to the dealership. You may also qualify with a bank statement that shows disability or military pension deposits. However, a military ID badge cannot be used since the dealership is legally prohibited from photocopying this form of ID.
Some dealerships offer student rebates for college students who will graduate within six months or already graduated within the past two years. In most cases, you must have completed a program at a two-year or four-year college, graduate program, or accredited junior, technical, vocational, or trade school program. To qualify, you usually have to bring a copy of your diploma, transcripts, or student ID.
You may be asked to enter your ZIP code so you can see offers available at local dealers. While rebates are typically associated with new-car purchases, some automakers will offer incentives on certified pre-owned cars from time to time. As with new-car incentives, rebates and other offers on certified pre-owned cars often come with specific requirements to qualify.
An automaker may require you to get a loan through its finance company, and the offer may be limited to certain models. At first glance, saving hundreds or thousands on the price of the car may seem like a no-brainer. Rebates on cars are a great way to potentially save money. Just be sure to read the fine print or ask your car dealer about qualification requirements or how the rebate works. You may qualify for a better interest rate with a bank, credit union or online lender, plus getting preapproved can give you added flexibility when negotiating the car price.
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