Rebates, Incentives, APRs - Questions & Comments

CarMan@Edmunds · January 2006

Hi hgii. I'm glad that you enjoy this forum so much. I believe that DaimlerChrysler's new college grad program works sort of like its supplier purchase program. Consumers who are eligible for it can purchase a new Chrysler, Dodge, or Jeep product for a special price that is listed right on the vehicle's invoice. On certain products that dealers have been making decent money on, like the Chrysler 300 or Dodge Charger this program is probably a pretty good deal. On other products that demand is less strong for, like a leftover Neon or a Chrysler Sebring for example, the pricing that is available through the college grad program probably isn't that any better than what you would have been able to negotiate on your own. I haven't heard much about this program and DaimlerChrysler doesn't seem to be doing much to publicize it, but I guess that it is sort of surprising that someone who works at a dealership hasn't heard of it, perhaps they're just pretending not to know of it

.

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kcrook2 · January 2006

thats a real question.. not sarcasm..lol

I have an 05 4runner and about 6-7k neg equity. My bank will finance a new Armada for MSRP (but who wants to pay that?)I found a local dealership online yesterday that is offering me an internet special of 38,777 + $500 off when I keep my test drive appointment for an 06 LE fully loaded.

Do you think that is the best price I can get and is it a good idea to go ahead and roll that neg. into the deal and come out with a price of $45k... basically what I am asking is like with my Toyota, will I be screwing myself in the end rolling the equity or is $45 about what an Armada is "worth" ?
Please help my internet deal expires Friday night.

wlbrown9 · January 2006

When I was looking a couple of years ago, the recent college grad incentive was not like the supplier pricing programs. At that time it was (on most vehicles) an extra $500 or $750 incentive for recent college grads, whatever that means. So, if there were a $2500 cash-back rebate your total rebate would be say $3000 ($2500+500). Or maybe just $500 rebate if you took the low rate financing instead of the rebate. At that time it was usual to see similar incentives for military. The F&I guy at the dealership should be able to give you info... The sales guys may or may not know or admit to knowing about some of these details.

Disclaimer...they may have changed the programs completely since it has been 2 years since I was in the market for a new vehicle :-)

qbrozen · January 2006

rolling that much negative equity is always a bad idea. Just think of how long you've had your toyota and how upside-down you are .... now multiply that by 2 since that is the negative equity you would then have in the Armada (probably even more since i'm pretty sure nissans typically depreciate more than toyotas).

CarMan@Edmunds · January 2006

You're absolutely right, wlbrown9. At one time, not that long ago, all of the "Traditional Big Three" automakers offered recent college grads something like a $400 additional incentive. It looks as though DaimlerChrysler has introduced the interesting new program that I mentioned earlier fairly recently.

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CarMan@Edmunds · January 2006

Hey kcrook2. You would be MUCH better off waiting until you are less upside down on your 4Runner to get a new vehicle. It's not like you are going from a small coupe and need a bigger vehicle because your family has expanded, the 4Runner is already big enough for most people's needs. So this seems like a matter of you just wanting something new and different. You can get a new Armada now, but you are going to end up paying waaaay more than you should for it and are going to be even more upside down the next time the new car bug bites.

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steine13 · January 2006

Nah... IF he can trade, this'll be the last time for a long time. It'll lead to a situation that only cash can fix.

As an aside, I'm not sure the poster quite understood how this all works, due to the remark "... they will finance up to MSRP, but I don't want to pay that much... "

Of course, you don't pay MSRP for the new Armada; you pay the going rate, then you add the negative equity and if the sum goes above MSRP, then you have to find a different bank or a second loan...

I'm with Car_man, it'd be lunacy to trade now. Of course, it's lunacy to begin with to be upside down on a Toyota... that's almost difficult to do with normal loan terms.

Be glad it's not an Explorer and enjoy it until it's paid off or right-side-up.

-Mathias

dino001 · January 2006

My suspicion is that this upside down situation resulted from several similar transaction that happened in last few years. It is basically impossible to be this much on a Toyota, even with 0 down, taxes rolled into the loan and subprime rate.

wlbrown9 · January 2006

Thanks. I guess this new program is the 'super secret' discount program since none of the DC branches gives any details other than .... update. I finally found the site for the details and rules on this program... http://www.dc-collegegrad.com/ Looks as if it covers 2004, 2005 & 2006 graduates...the rules are on a page off the main one. Looks like a pretty good program. Thanks Car_man

bill

CarMan@Edmunds · January 2006

You're welcome, wlbrown9. If you end up purchasing through this program, stop back and let us know what you think.

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mirage2 · January 2006

I've gathered info about a Toyota Highlander 3.3L V6 4WD--base invoice price of 23,942, invoice price of options $2263. Holdback of $598 and Wholesale Financial Reserve of $278 [I've read conflicting info about these -- that they should be minuses to the buyer, or that they should be charged the buyer]. Dealer's fees of Destination Charge $605; Toyata Dealer Advertising $599, Gas $10, Dealer Handling $295. Let's assume the buyer's incentive of $750 in our region continues. What is a low and fair price? $27,500? or lower? :confuse:

CarMan@Edmunds · February 2006

Hi mirage2. This particular discussion was created for consumers to discuss the incentives that are currently available on vehicles. For questions about how much you should pay for a particular model, you would be better off going over to the "Prices Paid: Buying & Leasing Experiences" forum. Click on the following link to visit the appropriate discussion: "Toyota Highlander: Prices Paid & Buying Experience".

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kcrook2 · February 2006

Well, we did it despite you guys advice and I think we got a KILLER deal. We rolled all that neg into the car and still stayed under MSRP... yea for us
we ended up with an 06 Armada LE with nav, dvd, leather... it has it all and is a much better keeper (because of course we can't buy another car for a looooooong time now) but its a family car and it is very comfortable, almost luxurious... any way, we like it...
thought Id let you know... :shades:

qbrozen · February 2006

what didn't you like about the 4runner? were you disappointed you didn't get it with leather, dvd, etc?

I can see it now ... "we can't afford the gas in the Armada, so I need to trade it.."

just poking fun. enjoy. as my father-in-law likes to say, "you have the rest of your life to pay it off."

CarMan@Edmunds · February 2006

Congratulations on your new truck, kcrook2. Thanks for taking the time to let us know how everything turned out. Make sure to hold on to it until you are less upside down this time

.

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wlbrown9 · February 2006

Not really in the market at this time. Just keeping up with the discussions. We had a '99 then '00 JGC Laredo. Brake problems, etc. Doubt I will touch another D/C vehicle in the near future. Wife drives a '04 Envoy XL SLT trim and I'm in a '00 Trooper. Found out when we bought the Envoy that she (FDX Global Logistics employee) qualifies for the GM Supplier pricing. Get close to the best price without all the hassle, even cuts out the DOC fee that many dealerships use to generate some additonal revenue. She may even qualify for similar programs with other auto manufactures, so before she retires, possibly in a couple of years, I'll consider replacing the Trooper. I bought my Trooper from a Chevy/Olds/GMC/Isuzu dealer. Round and round with them for about 3 hours to get a fair price. They kept coming back with BS, etc. still get a bad taste in my mouth thinking about the details. Was almost ready to walk and drive 200 miles to Nashville and see if I could get a no BS deal there.

wlbrown9 · February 2006

just poking fun. enjoy. as my father-in-law likes to say, "you have the rest of your life to pay it off."

Well, if you financed for 6 years, you will probably be 'right side up' in maybe 4-5 years. Until then the worst thing that could happen is that someone would hit you and total the Armada. If that happens and you have standard insurance, then you still owe the difference between whatever market value you can get from the insurance and what you owe. In your case GAP insurance might be worth it...not sure how much it would be. Insurance is a gamble, but being this much 'upside down' for 3-4 years is not a place I want to be.. Anyway, good luck with your new ride.

bill

kcrook2 · February 2006

I always put GAP on my cars... no matter what a good deal you get on a vehicle.. it's never worth that when you drive it off the lot. :P

kcrook2 · February 2006

when we bought the 4runner we only had 1 child... when the baby came.. it was a tight squeeze (might as well had kept my maxima) and we lived by the beach where as now we live where is snows and the runner was 2wd but now (unless we breed again, lol) we have room so granny or gramps can come along for the ride or we could pull some 2wd 4runners out of the snow.. :P

steine13 · February 2006

... there is a secret way to not need GAP...

And :P to you, too.

-Mathias

dino001 · February 2006

OK, I break the secret - it is called MONEY DOWN (woooa - scary - somebody wants to put money down...)

rroyce10 · February 2006

...... Yikes.!

It looks like Kcrook2 has a firm grip on that Armada ... they're barely doing the $28ish figure at the auctions, can you imagine what they'll they will be doing come summer.? .. I'll bet $24 will just about kill it come the 4th of July ...

can we spell GAP insurance ...?

Terry. :sick:

bbq1 · February 2006

Are any rebates or incentives for Acura (in CA) at this time?

CarMan@Edmunds · February 2006

Hi bbq1. Acura has some dealer cash on select leftover 2005 models to help dealers clear them off of their lots, but it is not currently providing any sort of cash incentives on 2006 models. The only special offers that it is currently providing on '06 models are special lease programs on the MDX and RSX.

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fredvh · February 2006

Do you know which select 2005 Acura models have the dealer cash?

bbq1 · February 2006

Thanks, Car_man!

wlbrown9 · February 2006

Yep...that is what I have been doing...trying to put enough in trade and adding a few $$$ when necessary to try and keep the value up... BUT, with the real drop in value of some vehicles over the last couple of years, it is a real stretch to keep up. My next one might be better off keeping the couple of grand in extra down in my pocket. I will also probably not trade since my 7-8 year ('00 Trooper) would probably bring a lot more from private sale than trading. I'll have to look at the cost of GAP, but I think I may take that gamble instead of trying to cover it out of pocket. I just looked at our latest vehicle. '04 Envoy XL, SLT. Bought through GM Supplier pricing, $5000 or $5500 rebate. GM MSRP almost $40,000. Financed about $31,000 after trade and added GMPP at a discount. Did not pull out any extra $$$ to reduce the principal. Financed for 5 years at 3.99% with dealers bank buddy matching my local credit union's rate. Checking what I owe vs what I would get if someone hit it and totaled, I look to be $1000-$2000 UP-SIDE-DOWN at this time. If I had not had the trade, GM Supplier pricing and rebate, I would be even worse that this. If I have used the other strategy and financed more covering the gap with insurance, then I would actually be better off by several thousand $$$$ if it got totaled. I don't want it to get totaled, but you can't always choose what happens.

dino001 · February 2006

Well, that's the thing when you keep the car for too short. No matter how great deal you get on a new one, you still loose. It may be proportional to the incentive - the higher incentive/discount (the "better" the deal), the more you'll probably lose next time around.

It is hard to get rid of that itch, I know. We all do it (trade cars too early), but it's never a "good" move financially, even if we get the greatest deal on the planet. Those pesky laws of finance...

wlbrown9 · February 2006

Well, I tend to keep vehicles 4.5 to 7-8 years before trading or replacing. At that point they are all right-side-up...mostly paid off. The real exposure I'm starting to see now is putting $2000-$6000 or more out in trade and maybe some additonal cash to keep from having a negative equity. The balance on the Envoy is probably between $24,500 and $25,000 with Edmunds best RETAIL used value being a little over $23,000. I had at least $2000 equity trade to reduce the out the door and a good deal with the supplier pricing plus over $5000 rebate. So, even after making 20 payments, if the vehicle would get totaled, I might still have to pull out a couple thousand before I even get to replace it. (Of course, insurance is a gamble since most of what I pay out is not returned in claims...but I'll weight all the costs in a year or two when I need to replace the Trooper. )

So, if I get the GAP and keep the trade and down payment $$$ in my pocket or savings AND the ride gets totaled, then the GAP pays off the inflated balance that is surely more that the insurance will pay. Instead of pulling even more out of my pocket to finish paying off the wreck, I'm way ahead. Also, you don't get to choose when you deal if forced to like this so the deals/incentives might not be favorable. Downside to this is it will be more expensive with the additional cost of the GAP and increased interest due to financing more principal.

I'm leaning this way, but I do really like having things paid off instead of using 'leverage' like this as some financial consultants would advise. I'll decide before I pull the trigger in a year or two...still have to consider all the angles and see if I'm missing anything.

dino001 · February 2006

It's all great, has big holes in your "I like GAP beacause I can keep money in pocket" line of thought, though:
1. You pay total higher finance charges (owe more, thus higher interest payment). You need to add this to your "to GAP or not to GAP" equation. At 0% APR it is zero, but those deals are long gone.
2. Probability of a total is low - it is actually not that easy to "make" the insurance total a new car - if it is worth say 30 grand and has 20 grand of damage, they likely insist on repairs.
3. GAP premiums seem low, so I was told (never was interested so can't tell for sure). However, the value of benefit starts diminishing very quickly after second year of the loan, yet you keep paying the premium for the full term. Thus, you have maximum benefit of say 3000 (just after you drove of the lot) going to zero (or close) after three an a half years or so (assuming 5 year schedule), even with worst depreciating car.

GAP reminds me those great "credit protector" deals coming with credit cards. Premium does not seem to be all that high for a "peace of mind". However, but when you look at the benefit, it is also very low (minimum payments for 2 years, thus it makes nothing to pay you card balance off).

CarMan@Edmunds · February 2006

I sure do, fredvh. According to the latest information that I have seen, Acura is currently providing $2,000 dealer cash on the 2005 MDX and $7,500 on the NSX (though I doubt that you are interested in the latter). I don't remember if I mentioned this earlier, but it also has special lease programs on the 2006 MDX and RSX.

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CarMan@Edmunds · February 2006

You're very welcome, bbq1.

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fredvh · February 2006

Thanks Car_man.

wlbrown9 · February 2006

Yep. This is what I will have to figure in on the next purchase. The only ones I've had totaled were by my step-daughter...and she is no longer on our insurance. It may be more cost with less return that it would be worth...just seems that I am having to come up with more out of pocket (plus I have even paid a month or two ahead) to keep from being up-side-down. I could afford to take a couple of grand hit if it did happen. Now my step-daughter could not and I got her to take GAP when she bought a 2002 Rodeo. I think it was maybe $400 for $17,000-$18,000 loan, not sure what it would be on say $30,000 loan. The insurance for her was worth it... She would have been just about cleaned out if she had to take a 2-3 grand hit if her ride was totaled...so the GAP would at least let her walk away without serious financial damage.

On the 0% apr loans...usually you have a choice of rebate or low/0% so there is a cost there as well...I have heard some ads lately on the radio about 0%, but have not paid attention to the details.

BTW, Allstate is now pushing some of their new type of insurance plans. One of them is something like 'New Vehicle Replacment' coverage. I looked it up last week and IIRC it replaced your car with a new one for the first 2 years if totaled...I'm sure the catch there is considerably higher rates to get that kind of coverage...I'll look at all these options when I get ready to buy in a year or two...will probably end up doing what I have before..using enough trade and $$$ to keep from being too much in the hole.

bigskygal · February 2006

Good morning. Does anyone know if there will be any upcoming GM rebates or incentives? I am looking at trading in mid-March for an H3, and want to know if I should trade now or wait & hope there is a rebate by then. Thank you for any help.

CarMan@Edmunds · February 2006

No problem, fredvh.

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CarMan@Edmunds · February 2006

Hi bigskygal. General Motors is not really providing any sort of cash incentives on the 2006 Hummer H3 right now. It has been selling fairly well without much in the way of support. The only cash incentives that are available on it right now are a $1,200 dealer cash allowance to dealers that enables them to offer consumers free DVD systems and a company-wide $250 dealer cash certificate program. The way the latter program works is GM dealers are provided with a select number of $250 certificates to use to help them sell vehicles. Most dealers will use several certificates on slow selling vehicles and none on popular models like the H3. I don't anticipate GM introducing more aggressive incentives on the '06 H3 in the near future, but it is difficult to predict exactly what automakers will do with their future programs.

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brandloyal · February 2006

Hi, I'm wondering if Honda will be offering any financing support on new or CPO CR-Vs in March or April. I have been leasing through Honda Finance on my last 3 vehicles and they sent me a letter stating that I am entitled to special rates for leasing but I'm not sure financing/purchasing support was part of this special consideration. My current Honda lease expires in April. Do you see anything in your crystal ball?

CarMan@Edmunds · February 2006

Hi brandloyal. My crystal ball tells me that Honda will introduce a special financing program on the model that you are interested in tomorrow. From February 17th through the end of the month Honda Finance is providing 4.9% financing for up to 5 years on all models in select states. My ball gets a little cloudy when I try to look further into the future than that though. My educated guess is that Honda will continue to offer a special lease on the '06 CR-V (it just introduced lease support for the first time on it last week) through April, but I doubt that it will have any special finance rates on it then. Of course, only time will tell exactly what will happen.

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geodonnell · February 2006

Anyone know of (or have an educated guess, crystal ball predictions, etc., on) any upcoming incentives on the Volvo XC90?

Thanks!

CarMan@Edmunds · February 2006

Hello geodonnell. Other than a special lease program, Volvo is not currently providing any consumer incentives on the 2006 XC90. However, it does have dealer cash available on it this month. Specifically, Volvo is providing $2,500 dealer cash on most '06 XC90 models. In addition to this regular dealer cash, Volvo is providing its dealers with the opportunity to earn up to an additional $1,250 dealer cash per model sold if they hit certain sales targets for the month. It is difficult to say how much extra dealer cash the dealer you are working with will get through the second program, but most dealers will probably get in the $350 to $750 range. Make sure to take this cash into account when negotiating your lease on the XC90 that you want.

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jvette · February 2006

I am trying to purchase a 2006 Tahoe from my local Chevrolet dealer. I have purchased many cars and trucks from them. I have been offered a 2006 Tahoe that is a demo. It has 5600 miles on it and was the owners demo. The sticker price is 49020.00. They have offered me a $5500 rebate and a extra $1000 in special coupons they have. Right now I am at a out the door price with tax and lic of $36,000 even including $2000 in GM card earnings. My problem is I am looking at this as a used car and they want to look at it as a new car. Should I expect any better deals because of it being a demo with 5600 miles on it? Or should I consider this the best price I am going to find? Any help would be appreciated because I have always purchased new.

CarMan@Edmunds · February 2006

Hi jvette. Your opinion about demos is exactly the same as mine. While this truck is still technically considered to be a "new" vehicle, in reality it is nothing more than a low mileage used vehicle and most dealers still try to get close to new vehicle prices for them. Most dealers are probably fairly anxious to unload any remaining 2006 Tahoes that they still have in stock now that the redesigned 2007 model is out. If I was in the market for one, I would expect to be able to get it for right around dealer invoice, minus the $5,500 customer cash, minus the $1,000 dealer cash. I would want to get a demo that already has over 5,000 miles on it for well below dealer invoice, minus the incentives. Afterall who wants a used vehicle when they can have a brand new one that nobody else has driven for practically the same price. If you do end up purchasing this truck, you may want to consider financing it through GMAC. GM is so anxious to unload its remaining '06 Tahoes that it is providing 0% financing on them for up to a whopping 6 years. It even is providing $500 customer cash in addition to this special rate.

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wearyshopper · February 2006

We are also looking at the XC90 There is an incentive through April 3, 2006 for a complementary premium package ($2995) You can find info on the Volvousa.com website.

wearyshopper · February 2006

Should an incentive offered by the manufacturer be included in the total discount negotiated for the vehicle. Currently Volvo is offering a complementary package worth $2995 and the dealer that I'm working with is including that in the total discount. Should I negotiate without including that $2995 in the discount from the dealer?

CarMan@Edmunds · February 2006

Hi wearyshopper. The dealer can try to include this incentive in the discount that it is giving you on this truck, but we both know that Volvo is paying for it - not them. If you feel as though you are not being given a large enough discount, you can always shop around a little to see what the lowest total price you can get the vehicle that you are interested in is. Check out the following discussion to see how much other community members have paid for similar vehicles lately: "Volvo XC90: Prices Paid & Buying Experience".

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bzurawski · February 2006

Is there any way to know what incentives Honda might be offering for the Odyssey in March 2006? Or, Toyota for the Sienna?

CarMan@Edmunds · February 2006

Hi bzurawski. Unfortunately, it is difficult to predict exactly what manufacturers' future incentives will be like. Dealers don't know the details of a new program until it is officially announced at the beginning of the month. In fact, many automakers themselves don't even know what their future incentives will be like until they look at their sales results to see which vehicles need extra support. I would not be surprised to see Honda introduce some sort of lease support on the Odyssey in the next couple of months. I've heard dealers have a pretty good supply of them on their lots and Honda introduced an advertised lease on it (unsupported) a few months ago. The introduction of an unsupported advertised lease is often a precursor to the introduction of lease support, much like it was recently on the CR-V. Toyota will probably gradually increase its cash support on the Sienna as the model year progresses.

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jvette · February 2006

I worked on this deal all weekend and finally made my last offer today and about noon. They said they would have to think about it and would call me back. We ended up agreeing on $15,176.10 off sticker and on Saturday I received a mailing from my GM credit card that added $1300 to my earnings to make it $2000 to use towards the purchase of a 2006 or 2007 Chevrolet. So after reading your post and standing my ground I ended up at $17,176.10 off sticker.

steine13 · February 2006

Clipped from CNN/Money... without permission....

The Detroit News said the "March Madness" event, tied to the NCAA basketball tournament, will run from March 15 to April 4, and will be similar to a promotion GM ran last March that included lower sticker prices on select models across GM's eight brands.

Last year's program also included cash bonuses of $500 to $1,500 on models that had been on dealer lots for more than 125 days.

GM officials could not be reached immediately for comment.

In a separate program, GM is offering between $150 and $700 in cash incentives to dealers who accept extra vehicles in the last week of February, the paper said.

Isn't this wonderful? I've got $2k in GM Card incentives, and now I'll sit around for two weeks while I wait for more manna to fall from heaven... or not.

Who in their right mind will buy a vehicle from GM in the next two weeks? Are these guys nuts?

Of course, something is needed... the trucks have some incentives, but the cars have none, with very few exceptions... what is wrong with these people? Do they really think anyone is going to buy an Impala for $2,000 more than the street price of a Camry? They were very proud of having lowered their prices; but a $1,500 reduction followed by the elimination of a $3k rebate is not going to sell more cars.

Thanks for letting me rant...
-Mathias

Rebates, Incentives, APRs - Questions & Comments

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