How To Use New-Car Incentives and Rebates

Edmunds.com

How To Use New-Car Incentives and Rebates

Knowing how to use incentives and rebates can save you thousands of dollars on a new car. Here are the most common money savers and how to find out about them.

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sathomps10

2 mistakes in this article. 1. A dealer has no control over the residual and can not manipulate it to their liking. Residuals are set by banks and any high volume dealer will look at multiple banks to ensure the lease they are offering is the least expsenive option. Ally might have the cheapest lease on a Wrangler, but US bank might have a better program on a Liberty. The dealer has absolutly NO control over a residual. 2. Edmunds reccomends zero down on a lease? You have to be kidding right? Any reasonable person knows you have to pay tax on anything that reduces the net cap cost of the lease (rebates). Also.. regarding a lease, your first payment is due at delivery, and you have your normal title and registration fees. A sign and drive lease means your rolling all your taxes, first payment, plates and etc into the lease. That means your paying interest on that amount. How does that makes sense? Pay your taxes, first payment and title fees. If you can't afford that, you shouldn't be buying a car.

chiattle

2 bad things about this article.

First, Leasing is about the dumbest thing anyone can do with their money. You might as well flush your hard earned cash down the drain. Not a smart financial decision in any measure.

Also, 0% financing. Sure, 0% sounds amazing, even for those who do qualify. But do you really think lenders give their money away for free? They have to make a profit in one way or the other. Be careful with 0% financing, because you may find some hidden fees in the pricing of the car. Check the fine print on the bottom of the TV when you see a commercial advertising 0% financing, and be sure you shop around for a fair price, with or without 0%.

And as always, it's better to buy outright than it is to finance. Just ask Dave Ramsey.

matthewmalk248

I know this is an old article, but wanted to knock down the ignorance of chiattles comment with simple math. Leasing is NOT dumb unless you're a complete idiot or aren't flexible with the model or brand you want and you take advantage of factory incentives as they try to push certain models. I'll prove my point with simple math. Let's take my RAM 1500 4-Wheel Drive, 4-Door pickup. A good price is around $43k. You have fat stacks of cash so you buy it OUTRIGHT, no interest. You drive it for 5 years, then trade it in (sure you can sell it privately, but who does that anymore) Avg trade in on this 5-year old RAM with 60k miles is about 18k. So (43k - 18k) / 60 = $417 per month you paid to drive this vehicle. Also consider the fact that 2 of those years were without full warranty, and you probably had to buy tires. Now let's look at a lease, I leased mine at $290/month with only first payment & fees at signing, and I get a new truck every two years, I never have to buy brakes, or tires, or any major maintenance. That price is for non-employee, otherwise it would have been $250/month for this 46k MSRP truck. Sure I would have preferred a Ford like I usually do, but they weren't pushing leases at the time and were around $360/month (Still far cheaper than purchasing). This isn't just for trucks either, I know a dozen people driving Ford Fusions right now because their lease payment is under $200/month with no down payment. I also know some people that think they are saving money by driving clunkers and end up spending that that in parts & extra gas. So if your savvy with the Lease, you can make a fool of these righteous "I only buy" morons. Unless you buy a car and keep it for 7+ years (and who seriously does that anymore) It all comes down to math.

stever

All I know is that I haven't had a car or lease payment since '82. That's a lot of extra cash flow for buying stuff I enjoy more than cars.

Different people have different priorities. Arguments never sound very solid when people have to resort to name-calling to try to prove their point.

travelgeek121

Matthewmalk is absolutely correct and I think chiattle started the "name calling" by saying those of us who choose to lease are dumb. Cars are NOT investments (unless. They depreciate and you pay for their use. You need to figure out what you are comfortable driving and do the math to determine how to lose the least amount of money. I leased a fully loaded Nissan Sentra as a second vehicle for example in 2012 for under $200/month with $0 down at the lease signing. for 3 years I paid around $7,000 for my use of the vehicle. I had no maintenance costs other than gas and oil changes (which are there regardless of the vehicle you drive). Not too bad to have a brand new reliable vehicle. If I had purchased this vehicle, I would've lost more money in depreciation. Auto Makers are willing to set residual values higher than they actually will be to gain business on the front end. Most of these crazy deals are financed by the automakers themselves and not 3rd party banks. Some vehicles do not lease well, if you are not picky and willing to follow rebates and incentives to a better deal you DEFINITELY CAN lose less money with a lease than a buy.

I see it working out better to buy is if you are buying a vehicle that is several years old and you are willing to deal with maintenance issues and having an older car that isn't so crisp and clean. All the Dave Ramsey fanatics out there can follow what he tells you and lead a very successful personal life but his advice is only so popular because it is intended for the masses and is EASY to follow. I think it's a great thing as it encourages people to not spend more than they make and keeps them aware of their spending. Personally, I do all of that and also take advantage of things like cash back credit cards, financing offers that do not increase my overall costs, and definitely leasing vehicles when it makes financial sense for your situation I don't pay interest on anything except on my house and take advantage of offers that make sense after the math is done.

Luxury2Minivan

The dealer told me if I financed through Chrysler Capital I would get $1000 off, but just take the financing, make 3 payments and then refinance. Am I held to making three payments?

kyfdx

Luxury2Minivan said:

The dealer told me if I financed through Chrysler Capital I would get $1000 off, but just take the financing, make 3 payments and then refinance. Am I held to making three payments?

It’s possible that the dealer gets a chargeback, if you don’t keep the loan for 90 days. Or, it could actually be a requirement of the rebate. We don’t know.

In my experience, it’s 6-8 weeks to get all of your title/registration and lien recording finished. Paying off the loan before that could be problematic, anyway.

Davercee

"In my experience, it’s 6-8 weeks to get all of your title/registration and lien recording finished. Paying off the loan before that could be problematic, anyway."

Oh my! I may have to keep this in mind.