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Get a 2005 Chrysler Pacifica for zero down, zero interest, and zero payment for one year. Drive home a new Ford Focus and grab a $2,500 manufacturer’s rebate. Do you live in a city where new-vehicle sales are slow? There could be a regional incentive on the car you’ve been eyeing. With the road to car ownership paved with deals and incentives, getting a new set of wheels has never seemed cheaper. So, should you run to your nearest dealership to avail yourself of these discounts? Consumer experts say “yes,” but you must scrutinize each offer to make it work to your advantage. Otherwise, you may be saddled with a model you don’t really like or end up owing more on the vehicle than it’s worth when you want to sell it. The following is an overview of special deals and incentives for car buyers and how to use them
Rebates
Also called cash-back incentives, rebates are cash discounts given directly to buyers by car manufacturers. Today’s car buyers have become accustomed to cash-back offers that many of them are reluctant to purchase a vehicle without some form of incentive. Fortunately, automakers have responded accordingly by offering rebates on almost all car models, except the really hottest selling ones. Rebates tend to be given nationwide (national incentives), although they are subject to availability and local incentive packages. Since rebates come from the manufacturers’ pockets, disregard it when negotiating the vehicle’s price with the dealer.
Regional incentives
Regional incentives apply to specific areas or states where sales are low. Regional incentives may be given in the form of cash or special financing. Unlike national incentives, regional incentives are not advertised on national media, so you’ll need to browse local trade publications and check with local dealers to know if any regional incentives are in place. Regional incentives may not be combined with national incentives, although regional incentives tend to be more generous than national incentives.
Dealer incentives
Dealer incentives are unadvertised cash incentives given by manufacturers to dealers to help boost sales of certain, usually slow-selling models. Dealer incentives may also be given to encourage dealers to reach a pre-determined sales target on certain models. Dealers are under no obligation to pass these incentives along to customers, but may be inclined to do so if they are keen on reaching their sales target.
Zero-percent financing
Zero-percent financing or low-interest financing is often applied to particular, usually slow-selling models. Furthermore, you must have a good credit record to qualify for a zero-percent financing offer. Some zero-percent financing offers are bundled with “zero down payment, zero payment for one year” promotions. If you’re availing yourself of a “zero down payment, zero interest, and zero payment” offer, make sure you’re not going to sell the vehicle in five years. Otherwise, you run the risk of going “upside-down” on the loan, or owing more on the vehicle than it is worth, due to depreciation and a sizable loan balance. Dealers generally do not allow cash rebates to be combined with zero-percent financing offers, so you’ll have to crunch the numbers to determine which would be the better deal for you.
Lease incentives
To make lease deals enticing, manufacturers may subsidize either the leased vehicle’s residual value or money factor, thereby lowering the customer’s monthly lease payments. However, lease incentives could raise the purchase price of the vehicle if you decide to buy it from the dealer at the end of the lease term. Therefore, make sure you don’t intend to exercise your option to buy the vehicle when the contract expires. |
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