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What's the Real Deal on New Car Rebates and Incentives?

May 03, 2012

While the true dealer cost and the invoice price will show you the way on how to really pay 'below the invoice price', it is important to know that new car rebates and incentives will also play a big part in getting a fair selling price on any kind of new car.

What are rebates and incentives? Are they the same? Can I use them both or do I have to choose?

New car rebates and incentives are--in essence--not the same, but they are both designed to give a lower selling price on any type of new vehicle.

Rebates or cash rebates are instant discounts given to the customer, whether leasing or buying a new car. There are some cars that come with huge cash rebates, while there are some that have none at all. You will notice that big SUV's and pickup trucks have big cash rebates during the summer, and this is because these types of vehicles are in low demand during that time of the year. You can therefore conclude that manufacturers offer cash rebates to vehicles that are not selling well during a particular time of the year.

But there are some instances when cash rebates are offered to new model vehicles. This will help boost sales and attract more customers into buying or leasing the new vehicle.

New Car Incentives

New car incentives can either be low APR or 0% APR financing offers, low monthly and $0 down payment lease deals, or a combination of cash rebates and special financing deals.

Incentives can also be given to a particular group of customers, such as new college graduates or college students, members of the US Military, or even loyal customers who continue to patronize a certain brand. In this case, new car incentives can come in the form of special bonus cash offers, rebates, or even low APR and low down payment financing deals.

Can I use them both or do I have to choose?

The answer will depend on what the dealer is offering. If the car that you want is offered with a cash rebate and a financing incentive, then it is highly advised that you take advantage of both. The combination of a cash discount and a low interest financing plan will maximize your savings and give you low monthly payments.

If your credit history is average or below average, there is a big chance that you won't qualify for dealer incentives. This is due to the fact that a big majority of new car incentives will require you to have a good credit history. If that is the case, then simply take the cash rebates and enjoy your savings.

Tip: If you are qualified to receive cash rebates and would want to finance the car, you should use the rebates as an addition to your down payment. You will get low monthly payments if you do so, and this is somewhat similar to receiving a low APR financing incentive.

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