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Rebates, Incentives, APRs - Questions & Comments

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  • Kirstie_HKirstie_H Posts: 11,025
    Well, I don't have any inside info (maybe someone else does), but I think your logic is taking you in the right direction. If you buy another GM vehicle, then the GM dealership should come out OK - manufacturer incentives to dealers, plus the fact that a used Cadillac fits nicely into their used car line-up.

    And think about this - how does Toyota know what your lease payment is? $500/month? $750/month? So, how could they make a legitimate & binding offer to "eat" your remaining 6 payments?

    Let's say, for example, that your lease payment is $500/month right now. Toyota would be eating $3000 if they bought up the last 6 months of your payment. Sure, as their advertising says, they will pay the remaining 6 payments, but you will likely RE-pay those payments. Plus, they'd have a Cadillac on a Toyota lot (or have to send it to auction), which probably isn't ideal for them.

    I'm just guessing that you're on the right track... the old, "if it sounds too good" adage is key :)

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  • joel0622joel0622 Posts: 3,302
    It could be what are some times called conquest programs. There has been several occasions where ford has offered to pay the remaining 3 payments on a competitive make. Right now we have early bird offers going on where Ford will forgive up to the final 6 payments on a Ford Lease.
  • kyfdxkyfdx Posts: 64,880
    I wouldn't bet on that with Toyota, though... They already have the most convoluted leasing program there is... (Well, along with Volvo).

    I think our OP's inclinations are correct, as well.. Probably GM has a program, and the Toyota dealer's advertisement is just a come-on..

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    Prices Paid, Lease Questions, SUVs

  • Currently there is a 1250 factory-to-consumer rebate on the car I am looking at. This just went up from the 700 rebate they were offering last month.

    It seems that when the rebate goes up, so does the vehicle sale price!
    Example: 700 rebate: price of car is 13,399 (after rebate). 1250 rebate: price of car is 13,459 (after rebate).

    And what's the point of a rebate if I am still paying what others have paid without the rebate?
    Example: I've seen people in my area getting the same car I want at around 14.9-15K OTD. I am getting a price of 14.8K OTD with the rebate.

    So should I be negotiating the sale price down further so the rebate actually feels like I am getting a rebate. I mean, it's a factory-to-consumer rebate, so why am I not seeing the savings? Is the dealer still trying to pocket extra cash?
  • oldfarmer50oldfarmer50 Posts: 10,226
    "...Is the dealer trying to pocket extra cash?..."

    From what you've said it would seem so. That's an interesting question though. Barring any last minute price increase from the manufacturer, (which would be dumb if they have to offer rebates) I can't see any reason for that.

    You don't say what year car you are looking at. If it's a 2007 they may be getting in short supply and thus command a higher price.

    2015 Mustang GT, 2009 PT Cruiser, 2004 Chevy Van

  • jamesamjamesam Posts: 15
    I had a Mercury dealer tell me yesterday that the current rebate is $1,500. But all I have found on the Internet is a $500 mfr to customer rebate?
    Is there a mfr-dealer incetnive I dont know about?

    (Looking to buy in Oct 2007)
  • joel0622joel0622 Posts: 3,302
    I know ForD dealers have the "Swap Your Ride" incentive going on. its an extra $1000 rebate to support the marketing campaign. You may or may not have seen the commercials on TV. Don't know if it crosses over to LM or not.
  • oldfarmer50oldfarmer50 Posts: 10,226
    One car I'm looking at has a $1000 cash rebate or 0% financing for 5 years. Depending on the bank rate you use 0% can save you $3000 or $4000 in interest payments over even a credit union loan.

    My question: Is there something I'm missing? Why would a manufacturer want to give you such a great financing deal but only a so-so cash back deal? I realize that the 0% only applies to top tier customers but still it makes me wonder. What's the catch?

    2015 Mustang GT, 2009 PT Cruiser, 2004 Chevy Van

  • joel0622joel0622 Posts: 3,302
    If the rebate was $4000 then all you would do is take their rebate and go to your credit union. This way the captive gets to keep you, and even though it is a 0% loan studies show that people who finance with a captive are 41% more likely to return to that make auto again when they trade, and 28% more likely to return to the selling dealer.

    Those numbers were accurate last year.
  • oldfarmer50oldfarmer50 Posts: 10,226
    "...41% more likely to return to that make..."

    Could it really be as simple as a gambit to generate repeat customers? If I'm calculating correctly, the 0% deal is worth over $4000 vs. a $1000 cash rebate.

    They must be looking for more than loyalty for 3 grand.

    Is there a limit on the percentage of the purchase price you can finance? I mean could I finance 80-90% at this low rate?

    How common are these types of deals? Maybe I should be looking around more. Say, joel0622, got any 0% deals on a Mustang GT?

    2015 Mustang GT, 2009 PT Cruiser, 2004 Chevy Van

  • joel0622joel0622 Posts: 3,302
    Is there a limit on the percentage of the purchase price you can finance? I mean could I finance 80-90% at this low rate?

    If your credit is good you could finance 140% @ that rate.

    Also, rebates don't get peoples attention like they used to.

    Sorry no 0% on the Mustang GT's. But I will put you on my list to call if it ever happens :D
  • oldfarmer50oldfarmer50 Posts: 10,226
    "...If your credit is good.."

    I guess it is. :confuse: Today when I was talking about rates with my credit union lady I mentioned that my FICO was 790 and I think I heard her gasp. She then approved me for 100% financing of any car I wanted to buy.

    No wonder people get into money trouble. Lenders just throw money at you.

    2015 Mustang GT, 2009 PT Cruiser, 2004 Chevy Van

  • cccompsoncccompson Posts: 2,388
    No, there's nothing you've missing here - manufacturers sometimes do things that make little sense.

    One of the biggest mistakes I ever made was in buying an '02 Chevy Avalanche with zero financing. The truck stickered for 38 something and the purchase price was 32 and change. Without my asking, the dealer said GMAC would finance 40 on it. I should have put the extra 7 plus in my pocket but, no, I was content with just financing the purchase price.
  • dino001dino001 Tampa, FLPosts: 4,562
    It was a mistake only if you had used that 7 grand on something different than some unnecessary purchase that you wouldn't make otherwise.

    On the other hand, if not having those 7 grand made you not buy something and wait until saved some money, that was almost as good as taking the 7 grand and putting it into work - with advantage of building equity faster. So - not such a big mistake, after all.

    2018 430i Gran Coupe

  • joel0622joel0622 Posts: 3,302
    Dino, you seem to be on track with this whole investment/money saving gig. Let me ask your advice on the subject.

    I had people ask me about that allot when we had the 0% for 72 going on. If they had for instance a PIF trade that was worth $10K they would want to know if it would be a good idea to get there trade equity back and put it in a CD/Money Market/etc. They would show me spread sheets on how much they could make on there $10K over the 6 year period.

    I would tell them that I am not a financial adviser but IMO the only way that made sense is if they were going to keep the car for the full 6 years or at least till they had equity.

    My train of thought was that if they financed 100% plus the taxes and then came to trade again in a couple years then they would be out of equity. Then they would roll that neg into a new loan at say 6.5% and kind of defeat the purpose. Then it starts the process of rolling a little more each time and before you know it your neg exceeds the original $10K. I would go on to tell them that car buying is not an investment and they should not look at it as a money making proposition in any way, just take the program for what it is worth and enjoy the free money. if they wanted to invest something I would be happy to tell them what there monthly finance charge could have been and they can invest that if they want to.

    Good advice?
    Misguided advice?
  • qbrozenqbrozen Posts: 22,103
    well, you are correct IF they roll negative equity. Of course, if they were smart, they would use what they put away and earned interest on to pay off that negative equity if the time came that they wanted to trade .... unless, of course, there was another 0% deal. :)

    They don't need to keep the car 6 years, they just need to not roll negative. In other words, if the option is pay $5k down now or take a 0% loan for $5k now and earn interest on your $5k, even if only for the next 2 years, then take that 2nd option!

    I am always of the opinion that you should take cheap money when it comes your way and use it to the fullest. I have 2 extremely low money factors on 2 cars right now (less than 1% each), while my money sits in a money market earning almost 5%. I could pay off in cash right now ... but why would I?

    '17 F150 Crew 2.7; '67 Coronet R/T; '14 Town&Country Limited; '09 LR2 HSE. 44-car history and counting!

  • dino001dino001 Tampa, FLPosts: 4,562
    I'm with you on that. Negative equity at 0% levered against investments makes sense only if they keep the car long enough to actually take advantage of that interest.

    There is also a significant risk exposure - larger than they probably realize - if the car gets totaled early, they will end up owing large chunk of cash, so if the investment is not very liquid (CD, real estate) or volatile (stocks), they may end up losing on the deal. Buying Gap against it would of course defeat the whole leverage, so it makes no sense, either.

    I like to keep things "real". If it's a car loan, it's a car loan, not car plus three trips to the mall. Mixing or levering those things against each other is only good for very disciplined and self-concious people who can say exactly how much money they really have after this "creative accounting" schemes are included. My short experience tells me it is most often done by people who are exact opposite - they don't want to face the truth, because it may mean they are living beyond their means and those levers are done to tell themselves they are smart and obscure the truth from themselves. They build Enron in their own personal finances. Of course, as detective Monk says "I may be wrong - but I'm not".

    2018 430i Gran Coupe

  • dino001dino001 Tampa, FLPosts: 4,562
    money market earning almost 5%.

    Enjoy it while it lasts - not for long. After this cut it will be "almost 4%", soon enough (more cuts) - "almost 3%", etc. ;)

    2018 430i Gran Coupe

  • qbrozenqbrozen Posts: 22,103
    yeah, I know it won't last.
    But, heck, its been lasting way longer than I originally thought, so its all just icing. ;)

    '17 F150 Crew 2.7; '67 Coronet R/T; '14 Town&Country Limited; '09 LR2 HSE. 44-car history and counting!

  • Does anyone know if Honda is going to have any CR-V incentives in the next few months? I've seen that they have lease incentives and finance incentives on all but the CR-V. I'm in the market for an EX-L, but would prefer to wait until some incentive - preferably financing, is offered. I asked at the dealership this weekend and got the "well we have terriffic deals anyway". Thanks, but no thanks :)

    Thanks in advance.
  • dtownfbdtownfb Posts: 2,918
    Generally the sales people won't know about incentives until the day before they take affect. Honda on ly uses incentives if they need to move cars. I guess you can check the sales of the CR-V compared to last year. If they are slower then maybe Honda will initiate special financing to move them.
  • cccompsoncccompson Posts: 2,388
    Not likely since it's about their hottest seller. I forget the numbers but '07 CR-V sales were WAY up over '06.
  • kingnhkingnh Posts: 4
    Is there any way to tell what the next round of Incentives or Rebates are going to be? Common sense tells me thats a big nope, but thought I would ask.

    However, there must be a list of the past incentives/rebates for a particular vehicle? I have searched and can not find anything of the sort, all I can find is the current ones. If armed with the last 6 months of historical rebates I can better judge how good the current ones are. I have no idea if the current ones are historically low, average, or great.

    Currently am looking at Tacomas and Frontiers which have $2250/$2500 cash back or (0%/36)/(0.9%/60) financing respectively.

    thanks
  • oldfarmer50oldfarmer50 Posts: 10,226
    "...If armed with the last 6 months data..."

    That's a tough one. Good question though. Is there a source that keeps track of historical rebate data.

    In a recent new car purchase I had enough lead time that I kept track of rebates on the models I was considering for a year prior to shopping. I noticed that the rebates began to increase in Nov.--Dec and then got progressively greater throughout the winter. They then stabilized as demand picked up in spring. The final increase came starting in July as they tried to clear out their lots.

    I've noticed big incentive increases if a new redesign is coming out in the fall so you might want to track that as well.

    Maybe someone here knows of a site that keeps track of past rebates. Automotive News might have that info if you have access to back issues.

    2015 Mustang GT, 2009 PT Cruiser, 2004 Chevy Van

  • smokey75smokey75 Posts: 434
    I just recently found out that I have Chrysler discount pricing available to me through a family member who used to work at corporate. I'm not sure what Chrysler calls their plans or which one is available to me but he said they would issue me a number that I would then take to the dealership. The price would then be fixed with no negotiation. He said it usuallys runs about 4-6% below invoice or 8-14% below MSRP. Anyway, I'm looking at Dodge Chargers & my question is this. They currently are offering a $3000 cash allowance. Should I still get this below whatever the price is?
  • joel0622joel0622 Posts: 3,302
    Depends. If Chrysler works the same way Ford does then your plan price will be 4% back of invoice less any Factory rebates and Dealer Cash. Plan memebrs do not qualify for special offers like college grad, first time buyer, American QH, or any of the private offer stuff.
  • Kirstie_HKirstie_H Posts: 11,025
    When I did that a few years ago, it was 7% below invoice, plus any incentives or rebates available to the public. In addition, the dealer told me there was a $500 discount coupon on Chrysler's website, and I was allowed to use that too. You had to go through the "build your vehicle" module on the website, and at the end, the coupon would pop up (or be e-mailed to you, can't recall), so you might check that out just in case.

    Hope you get an equally good deal!

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  • smokey75smokey75 Posts: 434
    Thanks for the replies... that would be great if I got the incentives on top of the discount.
  • Kirstie_HKirstie_H Posts: 11,025
    A reporter hopes to speak with first time car-buyers and discuss what features they are looking for in a car. If you are a first-time car buyer, please respond to ctalati@edmunds.com with your daytime contact information no later than Friday, March 28, 2008.

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  • Karen_SKaren_S Posts: 5,095
    A reporter is hoping to talk with consumers who purchased a car from 2004-2006 because of the incentives manufacturers were offering, such as employee pricing. Please respond to ctalati@edmunds.com before Friday, May 16, 2008 with your daytime contact information.

    Edmunds Manager UGC Click on my screen name to send a personal message. Need help navigating? Check out Getting Started in Edmunds Forums.
    Need help picking out a make/model, finding inventory, or advice on pricing? Talk to an Edmunds Car Shopping Advisor

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