New Car Incentives and Rebates 101

Car salesman showing car to couple

New car incentives and rebates, also known as 'current offers' or 'special offers', are savings programs offered by manufacturers to consumers on specific new car makes and models.

There are a variety of new car offers available, including low interest car loans, no interest car loans, cash rebates and special lease programs such as zero down payments, zero up-front fees and low monthly payments.  There are also specific cash incentives paid to dealers by manufacturers when particular vehicles are sold.  At their discretion, dealers can choose to pass along these savings to car buyers as an added sales incentive. 

Not only do manufacturer-backed incentives and rebates differ from make to make and from model to model, they can change from month to month depending on the program.  Be sure to research new car incentives and rebates ahead of time to determine whether or not the vehicle you're interested in buying comes with special offers.  If you're considering two or more vehicles, the types of incentives and rebates programs offered can play a significant role in your purchase consideration.

Cars with the Best Offers

While there are a variety of factors that impact new car incentives and rebates, two key factors outweigh the rest.

As a general rule, common vehicles — ones that tend to be readily available on dealer lots or ones that sit on dealer lots for longer periods of time — usually come with better offers than in-demand, hard-to-get vehicles.

What's more, you'll typically find better savings programs on vehicles nearing the end of a model year, as new models hit dealer showrooms.  In this case, manufacturers use incentives and rebates programs as way of moving leftover inventory to make room for new inventory, for new model years. 

The Rules of Combining Offers

If your new car comes with two offers, such as a low interest rate or a cash rebate, chances are you'll need to decide between one or the other, not both, since many new car incentives and rebates programs are not offered in combination.  For some, a lower interest rate is ideal.  For others, a cash back rebate is best.  Be sure to evaluate your personal financial situation carefully to determine the program that's right for you.

Current Offers and your New Car Deal

When it comes to applying current offers to your new car deal, begin by checking the vehicle's price online and don't forget to factor in the cost of optional equipment, destination charges and all applicable taxes and licensing fees, in addition to ongoing ownership costs such as gas, insurance and repairs. 

Next, determine your car's current offers by researching new car incentives and rebates online.  If you're contemplating a low interest loan, for example, be sure to check your credit score ahead of time since you may need to meet certain credit criteria in order to qualify.

Finally, don't settle for the interest rate offered by the manufacturer without comparing rates from multiple lenders.  You may find a lower interest rate offered by a competitive lender. 

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