Rebates, Incentives, APRs - Questions & Comments

CarMan@Edmunds · January 2005

You're very welcome, fredvh. General Motors always likes to have a "theme" to its incentives that it can advertise to lure consumers into the showroom. Last month, its theme was bonus cash for financing through GMAC. This month it is owner loyalty cash. Its incentives were not reduced across the board, only on certain models. I am not surprised that GM is not being as aggressive this month as it was during December. Automakers always like to have a strong year-end sales push, like Toyota does with the Lexus "December to Remember" promotion that it runs every year. It is difficult to predict what manufacturers will do with their future incentives programs with 100% accuracy, but I expect GM's incentives on 2005 models to increase as the year progresses.

Car_man

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rdy · January 2005

Is there Factory to Dealer cash and year end carry over on the discontinued LS and Ralliart 04 Sportback? I can only find an LS 2k customer cash incentive.

thanks

rdy

trentmngr · January 2005

I am wondering how to get the best deal on a new Dodge ram 1500 quad cab. My buddy works for Chrysler Financial and can get me the car at his employee price which is 5% under invoice, plus any rebates available. What if a dealer discounts the truck $3,000 off the $35,550 MSRP (he doesn't know I get the employee price YET) and then gives me the rebates as well for a total saving of $5,000. When I then tell him that I get the C.F. employee price, am I entitled to that $5,000 off, or will I only get the rebates because I am already getting the truck under invoice?

I see some dealers are blowing out '04s for like $13,000 off MSRP. How will that afect my employee price? Surely they won't give me 5% under invoice AND $13,000 off will they?

Also, since the dealer doesn't know that I get the Chrysler Financial employee price and asumes I am a regular customer wanting a good deal, he will be willing to come down off the MSRP price say $3,000. But, if I am only entitled to the rebates and no other money (because of the employee price) how do I go about getting more for my trade since any money that they knock off of the MSRP doesn't do me any good? I mean, I had a dealer offer me the truck at 500 over invoice but that doesn't do me any good since I am already getting the special employee price. He is obviously willing to come down on his price, so how can I get them to give me more money for my trade instead of comming down off of the MSRP?

Thanks,

Trent

trentmngr · January 2005

The dealer here in my town is blowing out the 04 LS for $33,400 after all rebates. Not bad considering the sticker on all three of them is over $46,000.

CarMan@Edmunds · January 2005

Hi rdy. Mitsubishi is currently providing dealer cash on 2004 Lancer EVO and Ralliart models, but I do not believe that it is providing any on the '04 Lancer Sportback at this time.

Car_man

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greenhousegus · January 2005

Hello Car Man,

I also am finding it difficult to find out current rebate/incentive information on 2004 vehicles. I am thinking of buying a 2004 Chevy Colorado Extended Cab and live in Michigan. Can you give me an update? I am thinking the $3000 rebate listed last year has carried over in the form of a dealer incentive or payout.

Thanks!

CarMan@Edmunds · January 2005

Hi Trent. If you are able to purchase a new Dodge Ram Pickup through DaimlerChrysler's employee purchase program you can get one for a great price without having to haggle. The prices that are available through this program are not negotiable though. You can not walk into a dealer off of the street, negotiate a low price and then expect to have it reduced by the discount from MSRP that you are entitled to receive through the employee purchase program.

As far as your trade goes, it is worth what it is worth to the dealer that you are working with. Sure they can over allow for your trade to make you think that they are giving you more for it than they actually are willing to, but doing so only cuts into the discount that you may have been able to negotiate on your new truck. If you are not happy with the trade-in allowance that the dealer that you purchase your new Ram from is giving you, you can always sell your truck on your own, or take it to a different dealer like CarMax to see what they will give you for it.

Car_man

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CarMan@Edmunds · January 2005

Hello greenhousegus. You are absolutely right. The reason why you are having a hard time finding out what incentives are available on 2004 General Motors vehicles is technically there are none, other than the owner loyalty program that it is running right now. Dealers were "paid out" by GM for any remaining 2004 models that they had in stock on January 4th. Specifically, GM paid Chevrolet dealers $3,000 dealer cash for any remaining 2004 Colorado Extended Cab models that they had. Make sure to take this cash into account during your negotiations.

Car_man

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carshopper8 · January 2005

Is there any way to know what incentives might be offered when the current slew of January incentives expire? I feel pressured to make a decision this week based on those going away, and not knowing what might take their place. If not in advance, when are February incentives published?

got cheated · January 2005

I just bought a Ford with Xplan (Ford partner's plan). Ford also sent me an internet rebate. When I presented both to the dealer, the dealer said he checked and everything was OK. So we paid the rest with credit card and finance, and took the delivery and drove the car home. Now today, he called me up and said that the rebate cannot be used with Xplan and wanted to redo the contract, or they will take back the car due to the "dealer rescind" clause in California. Can he do that?

xcel · January 2005

Hi Got Cheated:

___This is an interesting scenario. First, the car dealer could not sell the car as new given a title transfer is definitely in progress and 2., if they can rescind after you own it, why not take it for a nice drive around the country and I mean AROUND THE COUNTRY. Ok, you can have your car back. Sorry it has 7,000 miles on it ;-)

___I am very interested in the outcome in either case as I have never heard of this before.

___Good Luck

___Wayne R. Gerdes

steine13 · January 2005

Can he do that?

yes he can.

he didn't cheat you, he made a mistake.

pay the extra money if you want, or return the car if you don't. if you return it, it's not your car, so don't abuse it, and don't pile on the miles.

as my five-year-old daughter would say: "Easy".

not every screwup is an attempt to defraud.

-Mathias

kat7 · January 2005

I am finally going to purchase the Nissan Sentra I spoke about a few weeks ago. I think I got a good price - fully loaded 1.8s, spec. edition package, abs brakes, sun roof, mats, splash guards, microfilter, everything except satellite radio for $14,000. They tell me however, that the NY Sales tax is computed on the price of the car BEFORE rebates and I just want to know if you have ever heard of this?

CarMan@Edmunds · January 2005

Hi carshopper8. Most automakers' January incentives are really not all that aggressive. If I had to make an educated guess I would say that the offers that are currently available on most vehicles this month will either be continued or enhanced for February. Of course now I need to write the disclaimer that it is difficult to tell what manufacturers will do with their future incentives programs with 100% accuracy. If I was in the market for a new vehicle right now I definitely would not feel any pressure to finalize my deal by the end of the month.

Car_man

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CarMan@Edmunds · January 2005

Hello kat7. Generally speaking consumer cash incentives are taxable and dealer cash incentives are not. By this I mean that most states calculate sales tax on vehicles before consumer cash incentives are deducted from their price and after dealer cash incentives are deducted. So the dealership that you are working with is calculating the tax on your car correctly.

Car_man

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ddelise · January 2005

For the most part I agree with Mathias. But I would definitely try to get the dealer to offer the amount (or half of it for instance) as a service credit. You never know until you ask...

Damon

qbrozen · January 2005

I'm not one to try to start heated debates by any means, but I do have a question on this issue. In CA, if the buyer were to find out they paid too much for a car, would they be able to return the car and kill the deal??

kyfdx · January 2005

If you could come up with an apples to apples scenario.. I'm sure they could...

But, there is always that fly in the ointment..

It is easy for a dealer to have the paperwork that shows they credited a rebate to the customer, that they weren't eligible for..

I can't think of a similar scenario for the customer, where they would have the paperwork, and that it couldn't be explained as part of the negotiation..

qbrozen · January 2005

ok, that makes sense. IF they could prove I was not eligible for the discount/rebate, then, yes, I would have to concede.

BUT, it definitely would have to be proven to me in the contract or discount paperwork or whatever was involved with the deal, and not just "because I/corporate said so," or even "hey, here's this new fax that you never saw before stating it is so."

kat7 · January 2005

Thank you so much for all of the help you've given to me. I should be driving my new car on Saturday!

steine13 · January 2005

The reason I'm inclined to believe that it's a simple mistake is this: The dealer can not possibly "take" the rebate from the customer; it has to be explicitly signed over.

And it's not surprising that mistakes get made; it gets complicated...

-Mathias

CarMan@Edmunds · January 2005

You're welcome, kat7. Good luck and don't forget to stop back and let us all know how you like your new ride.

Car_man

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vita · January 2005

i'm new here, but i've found it very informative.

1) does anyone know what kind of incentives/dealer cash is available on an '04 aveo, '04 sunfire, and '04 cavalier? i am specifically looking at the SVMs (bottom of the line)

2) i see that the january incentives aren't seen to be too agressive, since i am looking into the bottom of the line models, i believe i can get the 1500 owners loyalty cash from GM, is this likely to continue?

3) we get the family price on all GM cars as our grandpa worked for GM nearly all of his life, do any incentives add on to this, or are we poised to get the best possible price regardless of incentives?

any feedback would help greatly, thank you.

jaburg · January 2005

Does anyone know what incentives (if any) are coming for Feb. on Kia Sorentos? I have seen in some places that there is $1400 now, but other places say no such thing. I searched this forum but found nothing pertinent.

Thanks!

rdy · January 2005

Thank you Car-Man.

I am guessing there is a 5% year end carry over on the 04 Sportback PLUS its discontinued!

The 2k customer cash only applies to the LS, not the Ralliart...which MUST be harder to move surely?

rdy

YMMV

jeepster4 · January 2005

Manufacturers do not tell the Dealers about new incentives until the morning they go into effect!

CarMan@Edmunds · January 2005

Welcome aboard vita. I would be more than happy to tell you what sort of final dealer cash payments General Motors made on the vehicles that you are considering. On January 4th, it paid dealers with 2004 models still in inventory $1,500 on the Chevrolet Aveo and $4,000 on all Pontiac Sunfire / Chevrolet Cavalier models except for ones with the 1SV package. This dealer cash is in addition to the $1,500 owner loyalty that is available on all models and the $1,500 conquest cash for owners of non-GM products on the Aveo.

It is difficult to say what General Motors February incentives will be like on 2005 models, but I think that it is pretty much done making any changes to its offers for 2004 models. All of the aforementioned incentives would be compatible with the GM employee purchase and retiree purchase programs.

Car_man

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CarMan@Edmunds · January 2005

Hi jaburg. Through January 31st, Kia is providing $1,400 customer cash or 0.9% financing for 2 years, 1.9% for 3 years, 2.9% for 4 years, 3.9% for 5 years and 4.9% for 6 years on the 2005 Sorento. In addition to this customer cash, it has $1,000 conquest cash for owners of select competitive products (there should be a list of the exact models on its web site). It is difficult to say what its February incentives will look like, but I suspect that they will be at least as aggressive as the current program is.

Car_man

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kasumi · January 2005

What is the best way to include dealer cash in the deal? I'm looking at a Volvo S80 with $1500 dealer cash, should I start at the Edmunds TMV and then subtract $1500 as my first offer?

Thanks!

k.

sunfire_girl · January 2005

I'm in the market to buy a 05 Sunfire. I'm having trouble finding one with all the features I want. I'm looking for the 1SC with 5-spd, power package, sport appearance package, and sun and sound package. I've read in previous posts about dealers charging a transportation fee just to locate and get the car to their lot. Is this typical? I don't have a lot of money and I'm looking to get this car as cheap as possible.

Also, the MSRP is $18,885 (before incentives and my trade-in). What would be a good price to aim for? Is it possible to get this car below invoice, or would that be asking too much?

I also heard Pontiac is going to stop making the Sunfire this June. So would it be safe to assume the incentives will increase next month?

Thanks!

steine13 · January 2005

Ok Sunshine,

You're smart enough to use a computer, you're articulate and you know to ask good questions before you pay money for a car...

...but you want to buy a NEW Sunfire???

Can we interest you in a nice Pontiac Vibe, at least? Or something Honda? Mazda, if you want that domestic connection? How about a used Chevy Prizm?

The Cavalier/Sunfire duo is 20-year-old junk. There's plenty of good "old-design" cars out there, and there are good cars built by GM today, but these are the absolute pits. Please tell us what your needs are, and someone here will point you towards something you can enjoy for a few years.

No trying to be mean or anything, I remain,

-Mathias

sunfire_girl · January 2005

I actually owned a 95 Sunfire for 4 years....up until we had a run in with a tractor-trailer and concrete median a few months ago. I do not recommend that, by the way. That car never gave me any problems. Almost 200K miles on it. I know a lot of people who were dissatisfied with J-body cars, but I also know just as many who love them...including me. Thanks for the suggestions though. Those other cars are all nice, but do not offer the style and/or price range that I'm looking for.

~Sunshine :P

billsbuddie · January 2005

am not sure that this topic is as appropriate for the "car dealer" as it is for a politician but maybe they are in cahoots. This rebate business seems to generate lots of "unearned sales tax for states. The product is actually being "discounted" so the amount of the sale is what goes out the door. I know that politicians are always looking for more but this is really taxing a "ghost sale".

Does anyone know the origin of taxing rebates, or why car manufacturers continue this ruse rather than be honest and level with the customer just offering discounts for different groups that they want to attract instead of this rebate business? I sure hate paying taxes on "smoke and mirrors".

Anyone think that the dealers association is getting some "pork" for allowing this to continue

qbrozen · January 2005

you mean below invoice BEFORE the $4500 in rebates? I certainly wouldn't pay OVER invoice for that car, that's for sure. I think invoice is roughly $17,5k for what you want. Take the $4500 off of that brings it to $13k. I'd say that's reasonable enough.

have you thought about a Scion? You can get an xA with cd changer, subwoofer, and security add-ons for about $14k. all the power stuff comes standard. i think the only thing you'd be giving up is the sunroof, but you get the extra space and better resale in exchange.

Kirstie_H · January 2005

The Edmunds.com Forums really aren't the right place for this sort of discussion - we try to veer away from politics, given the number of forums & chatrooms already available.

If you want to talk about how vehicle taxes are collected and used, the News & Views board is a better place.

billsbuddie · January 2005

Kirstie,

Sorry if this is out of place, I am sure the "title" is. However, I know of no other situation, other than car purchases, where discounts on retail goods, (rebates) are taxed by anyone. It seemed that it fit with a discussion of rebates but I will defer to your judgement.

sunfire_girl · January 2005

I'd be happy either way....with the price being below invoice, before OR after accounting for incentives (which are only $3,000 in my area). How likely either would be? As a first time buyer, I'm not sure how far my negotiating skills will get me. I'm just looking for a ball-park number to aim for.

Yes, I have looked at Scions. For some reason, I just can't get past their hideous appearance. The tC is nice though...but too expensive, with all the options I'd want.

steine13 · January 2005

"Yes, I have looked at Scions. For some reason, I just can't get past their hideous appearance. The tC is nice though...but too expensive, with all the options I'd want."

If you define "expensive" as money spent, you're certainly right. If you define expensive as what it actually costs, per month or per mile, to drive a car -- iow, taking into account resale value -- the tC will be cheaper starting about 5 minutes after you leave the dealership.

Not to discount the importance of cash flow, but a new Sunfire will be an expensive proposition due to the fierce depreciation.

-Mathias

(not a fan of the Cavalier/Sunfire twins. Last real redesign: Year of Our Lord 1994)

sunfire_girl · January 2005

Please don't take this the wrong way. I really do appreciate the advise about alternative cars, and I'm fully aware there may be better choices out there. However, I'm just looking for some answers to my questions about the Sunfire. The car I plan on purchasing is not really up for negotiation at this point. Also, I plan on keeping this car til it no longer runs, so depreciation is not a big concern. So, do you (or anyone else reading this) have any advise regarding my previously-mentioned questions? Would it be reasonable to attempt to negotiate for a price below invoice (either before OR after incentives) for this car?

caylan · January 2005

Hello board members:

I'm In the market for '05 Jeep Liberty & my questions are:

How much should the dealer Holdback be factored into the negotiation &

What is the Jeep holdback right now?

This is a murky area when trying to price the true "invoice" of a car.

Is there a good time of year when incentives are @ their highest?

Thanks for any comments.

steine13 · January 2005

"The car I plan on purchasing is not really up for negotiation at this point"

Fair enough.

"Would it be reasonable to attempt to negotiate for a price below invoice (either before OR after incentives) for this car? "

Soitenly.

GM incentives are a bit of a jungle, and they change at least monthly.

This month it's $1,500 owner loyalty on anything, and I've also heard of $1,500 conquest, and I don't know if they can be combined. So the price you can get doesn't so much depend on invoice, but on what you're driving *today*. I.e. if you take the bus to the dealership, you'll pay $1,500 more.

Then there are the $500 "in the driveway" certificates, which a dealer can apply (or not, or apply several) to a deal. I think that's how it works, but I kinda lost track. The other part of "in the driveway" is that you get the GMS pricing, and don't pay doc fees etc. This is a non-negotiable price, slightly below invoice, and the dealer gets made whole from GM.

Then there's the GM Card (old vs. new)...

And dealer cash, but Pontiac usually doesn't do that. I *think*.

As you can see, it's a bit of mess. At least you're in the right place; Car_man should be able to help you out.

Good luck,

-Mathias

CarMan@Edmunds · January 2005

Hi kasumi. Dealer cash should definitely be taken into account when you make your offer on the car that you are interested in. If you feel as though Edmunds.com's True Market Value is a good price for this car, subtract the dealer cash from it and then present your offer to the dealer that you are working with. Another way to come up with a selling price would be to look up this car's dealer invoice price, add a reasonable profit to it, and then subtract the $1,500 dealer cash.

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CarMan@Edmunds · January 2005

Hi sunfire_girl. Dealers will often charge consumers a nominal transportation fee if they are trading for a vehicle that is at another dealer that is very far away. However, dealers swap cars with closer dealers all the time without adding any additional charges to deals. It has to be worth their while to trade for a car for you though. They aren't going to do so if they aren't making any money on your deal. You should be able to buy a new Sunfire from a dealer that has one in stock for right around invoice, perhaps a couple hundred dollars over, and then deduct any available incentives from that price.

Have you looked around at all of your local Pontiac dealers to see if they have the exact car that you want? You can do so by calling or e-mailing them directly, or by using the "New Vehicle Search" function that is available at GM Buy Power. Perhaps you can find a dealer that has the car that you want and deal directly with them rather than having a dealer trade for it. You also may want to think about being a little more flexible about this car's options and just purchase one that is close, but not exactly the same to the way you want it equipped.

It is difficult to say what automakers will do with their future incentives with 100% accuracy. If I had to make an educated guess, I would say that GM's incentives on the 2005 Pontiac Sunfire will be at least as aggressive next month as they are right now, if not more so. As a result, I personally don't think that you are risking much by waiting until the new February incentives are introduced to purchase your new car.

Car_man

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rroyce10 · January 2005

.. **(not a fan of the Cavalier/Sunfire twins. Last real redesign: Year of Our Lord 1994)** ..

Why don't you tell us how you really feel.? ..l.o.l...

Terry.

CarMan@Edmunds · January 2005

Hi caylan. While it is good to be aware of dealer holdback and how it works, mentioning it during your negotiations with dealers generally tends to upset them and can often disrupt negotiations. You can find out more information about dealer holdback by clicking on the following link: Edmunds.com Dealer Holdback Page. If I was in the market for a Jeep Liberty, I would look up the exact dealer invoice price of the model that I wanted in the New Vehicle Pricing section of this site, add a couple hundred dollars to it, and then subtract any available incentives and offer this price. Specifically, DaimlerChrysler is providing $1,500 customer cash or up to $3,000 ($2,000 customer cash + $1,000 Chrysler Financial bonus) if you opt to finance this truck through Chrysler Financial at 0% for up to 4 years and 3.9% for 5 years. The most attractive offer by far is to finance the Liberty at 0% for 48 months and take advantage of $3,000 customer cash.

Car_man

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qbrozen · January 2005

just wanted to point out that my $4500 number was taking into account the $3k cash PLUS the $1500 owner loyalty since I figured your previous Sunfire would qualify you as being loyal, no? But, eh, what do i know? i've never purchased the same brand twice.

kyfdx · January 2005

These had big lease incentives from August through the end of the year... Then, all the lease incentives went away..

Do you know if BMW paid the dealers any cash incentive at that time, on any leftover units?

regards,

kyfdx

CarMan@Edmunds · January 2005

Hey kyfdx. You're right, BMW had 1.9% financing and quite a bit of lease support on the 2004 X3 late last year, but it seemed to drop those programs in January. If BMW gave its dealers a final dealer cash payment for any '04 X3s they had remaining in inventory at that point I am not aware of it.

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sunfire_girl · January 2005

Qbrozen-

Actually, I had to "total" my previous Sunfire, so unfortunately I now drive a luxurious (note sarcasm) Hyundai Accent. Although, my sunfire's registration is "technically" still valid through next month, I'm guessing they won't consider me a current GM owner. Not sure though...

Car_man-

Thanks for all the great info. I have been keeping constant tabs on GM's site. So far I have not been able to find anything in this entire state that is close to what I want. Basically, I want an almost fully-loaded car...but all the fully-loaded ones nearby are automatics. I refuse to drive automatic. Also, I'm specifically looking for a black car (same as my old one). So it sounds like I'm going to be paying slightly more to get exactly the car I want. But perhaps I can get the car's price low enough to sorta make up for the shipping cost.

CarMan@Edmunds · February 2005

You're very welcome, sunfire_girl. Let me know if you have any other questions and good luck in your search.

Car_man

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Rebates, Incentives, APRs - Questions & Comments

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