Rebates, Incentives, APRs - Questions & Comments

oldfarmer50 · April 2007

I noticed that the rebates on new Mitsubishi vehicles have vanished. Edmunds lists NO rebates and the Mitsu site says they are updating their list.

Some of their cars have had $2000 rebates since December of 2006 (for 2007 models). Is it usual for car companies to just up and stop rebates cold? Or is this a seasonal thing; you know, Spring is here "I gotta have a new car" sales go up and rebates go away?

isellhondas · April 2007

Yeah, 6.5 seems to be the best rates out there. Last weekend boeing had a credit union sale that shaved a half percent off that.

Funny how some people think 6.5 is high for a car loan!

dino001 · April 2007

I would not worry. $2000 rebate is highly unlikely to disapear into thin air. More likely is that Mistubishi did not post new rebates yet or Edmunds staff did not receive official release. The lag may be as long as a week.

paisan · April 2007

6.5 is super high for a car loan!

I'm paying 1% on my Armada.
Subaru has 1.9% on their 07 models.
GM has 0%.

-mike

british_rover · April 2007

Those aren't rates they are incentives shown as a rate.

Prime is 8.25% currently so anything in the 6 percent range is great.

I think the best we can do on a 60 month new carloan for someone with stellar credit who is buying a financing over 40,000 dollars and is putting down 20% or more is 5.99%. The bank we work with is also our floorplan bank so they offer equity and luxury discounts that buy down their normal base rate to just under 6%.

If it is not a new car or they don't put more then 20% down or they aren't finacing over 40,000 dollars then you are back in the mid to high 6% range.

paisan · April 2007

Well if they are borrowing money from Japan I believe their rates are significantly lower than here in the US, so if it's a Japanese company they may be passing on their savings. Either way, if the incentive is being shown as an interest rate, it doesn't matter to me really.

-mike

isellhondas · April 2007

Well, if you weren't getting a 1% rate on that Armada, they could have sold it to you for less. SOMEBODY has to pay for those artificial dollars.

The domestics started this insanity and it has nearly put them out of business. They are on a treadmill they can't escape. These is no free lunch, anywhere!

Cars that are good sellers don't need this!

paisan · April 2007

Well I got cash + 1% financing.

It was the first model year of a new car.
Early on they had too small of front brakes so they weren't selling too well on the back of that (I knew however a recall was pending that would fix the brake problem)
Gas prices hit a super high level (don't remember how high though)

-mike

wlbrown9 · April 2007

New rebates listed at www.gm.com look under current deals. Tahoe now shows 3.9% or $2000 rebate. Avalance shows the same...note, these are for Shelby County TN...your area may be different.

These show being good through 7/9/2007, some models have extra bonus cash available through the end of April.

joel0622 · April 2007

Well I got cash + 1% financing.

But you gave up cash to get that 1% I would guess.

The conversation we were having had to do with the standard interest rates, not subvened or manufacture backed.

paisan · April 2007

Nope it was 1% + Cash Back, not an either/or dealio.

-mike

isellhondas · April 2007

Mike,

You are missing the point.

SOMEBODY had to make up the difference between the artifical rate and what the real money rates were at the time.

gogiboy · April 2007

"The domestics started this insanity and it has nearly put them out of business. They are on a treadmill they can't escape. These is no free lunch, anywhere!

Cars that are good sellers don't need this"

isell--in general I agree with you, but if you lurk on Edmunds and the manufacturer's websites long enough you can find just about any car including strong sellers being offered with great manufacturer sponsored rates.

Case in point: I was offered 2.9% last month for a Civic SI Sedan (all the Civics were being offered at the same regional rate) and 1.8% on a Mazda3 hatchback. I don't think either car can be considered a poor seller. I'm paying a whopping $250 interest on my Mazda loan. God bless Ford Motor financing--the working man's friend. I am happy to be able to take advantage of a Ford subsidiary while there still is a Ford.

8 years ago I bought a used car that had 10 3/4% interest (for excellent credit). Fortunately, I was only financing $4000/2 years and I still have that great car. I agree 6% is very reasonable although not as good as the 4.5% I had on my previous home loan.

Gogiboy

dino001 · April 2007

If it costs them say 4% (probably more) to acquire money from the bank or deposits and then they provide you with 1.9% loan, it means they are paying 2.1% for that loan. It could have been converted to some cash incentive, but they chose not to. It does not change the fact that it is an incentive rate, subsidized, or paid for, by the manufacturer.

Craig et al were trying to tell you that 6-6.5% is a normal unsubsidized market rate loan, where the loan underwriter will not lose money.

dino001 · April 2007

It probably means that those profitable manufacturers simply adjusted their prices to account for the incentive, while those unprofitable have to cope with them just to sell anything.

Consumers were conditioned to expect low rate loans and/or cash incentives. On top of domestic cash back/0% craze, even the market loans were cheap (down to 4%) due to Fed rate cuts. That party is over, so maintaining low-interest loans means the incentives got higher. Of course, the stickers and invoices magically went up, too. So those manufacturers having successful products have APR incentives, but could have lowered the price with same results (at least on balance sheet). However, conditioned consumer may not believe that and turn to competition - thus everybody is stuck.

I don't believe GM, Ford, or even BMW really want to own those cars they subsidize, but it's current reality and it will be for a while.

bpizzuti · April 2007

Don't those low or "zero" rates come with fine print charging X amount of dollars per $1000 financed? Basically, you end up still paying for the money you borrowed, just as a flat charge per $1000, rather than as a percentage (hence, TECHNICALLY no interest).

I was reading the fine print on one of those back when I was shopping, and realized that that charge, after all was said and done, added up to a higher interest rate than my credit union offered me.

joel0622 · April 2007

Don't those low or "zero" rates come with fine print charging X amount of dollars per $1000 financed?

You read wrong. Try as you might it is what it is. 0% no interest nada, no charges, no service charge. The disclaimer you read is how much it cost to finance per thousand $$'s . For instance 0% on go months means your payment will be $16.67 per $1000 borrowed. The only manufacture I have ever heard of not running a fixed 0% is mitsubisi, but they run those 50 years of no payments crap also.

oldfarmer50 · April 2007

On another board someone was complaining that the rebates listed on Edmunds were not available at his local dealers.

I thought that mfg. to customer rebates were not a dealer choice item. If Ford, for example, says rebate for your area the dealer can't say "Sorry we don't do that here".

I could see if it was a Mfg. to dealer incentive but I checked Edmunds and the car this fellow mentioned had only mfg. to customer rebates.

I have sometimes seen on Mfg. websites rebates mentioned with a "contact dealer for details" statement. Does this mean the dealer can play games with you?

paisan · April 2007

I believe all the rebates apply only to "participating dealers" but I'm not positive on that.

-mike

joel0622 · April 2007

On another board someone was complaining that the rebates listed on Edmunds were not available at his local dealers.

Rebates are what they are for your region. If it is an available rebate then the dealer is obligated to give it to you. Some times there is confusion on the consumers part when they take a special rate instead of the rebate, the majority of the times they are either or.
If it is a Ford dealership where the confusion lays just let me know your Zip Code and the vehichle type and I will tell you what the incentives are.

wlbrown9 · April 2007

I remember GM in particular cutting MSRP over the past several years to try and reduce rebates / incentives while keeping the average transaction about the same. Kind of an image thing.

We bought an Envoy XL SLT in May 2004...MSRP almost $40K. Rebate had just gone up another thousand to $5,000. (Interest rates at the time were running 3.99% through our Credit Union.) I looked at the same Envoy last year before the Xl was cut from the line up and the MSRP had gone down several thousand dollars. This would allow GM to get to the same competitive price needed to sell these vehicles with less incentive/rebate. About the same profit and transaction price without as much 'negative' publicity about them having to offer HUGE incentives to move their vehicles.

steine13 · April 2007

... all true, except for the confusion trying to figure out what to pay for one of these cars.

I went through that looking for '06 Silverados... in the end, bought an '07 Classic without all the obfuscation.

GM is one messed-up company. Even when they do something reasonable, it somehow becomes complicated.

-Mathias

wlbrown9 · April 2007

I think some of us get hung up on discount or amount under MSRP we can get instead of the real price of a vehicle. I'm thinking about replacing my '00 Trooper within a year or two. I was thinking that I might move up in size to a Yukon/Tahoe size vehicle since I don't want to move down in size. Now GM has the Outlook/Acadia/Envoy that looks really attractive and the gas mileage is a little better. They are still new and selling pretty good and no huge discounts. The Outlook/Acadia start at $29K-$30K while the Yukon/Tahoe start at roughly $35K (MSRP). But if I had to buy now, it looks as if discounts on Yukon/Tahoe are much better than the Outlook/Acadia...local ads in Memphis have Yukon/Tahoe discounted down to under $30K, so pricewise they are comparable to the current Outlook/Acadia. Which is the better deal? I'm thinking that maybe later the Outlook/Acadia/Envoy might have larger discounts or rebates, but I'll just have to wait and see what happens.

gasman1 · April 2007

You may want to wait until this summer when gas prices bust $3 to $3.50 in the mid-west and coadtal prices close on $4. The large SUV rebates will be HUGE.

But to answer your question of buying now... There's hardly ever a clear cut one way fits all answer. It depends on how you plan to use the vehicle. Towing and/or real off-road or gravel/secondary roads, then the Yukon/Tahoe. All primary roads with a lot of highway miles with passengers, the Acadia/Outlook/Envoy due to comfort and mileage.

Personally, I'm impressed with the new GM large SUVs more so than the GM CUVs to date. The Buick might change my mind, but the Acadia I checked out had a cheap unfinished look to the interior. I also hated the large blind spot in the A-pillars and the pricing is to high.

The January week that I had with a Suburban rental for businss was impressive. Not a perfect interior, but decent. Very impressed by V8 to V4 switch over as I found it extremely hard to ever notice the switch. Good job! Mileage wasn't that bad for the size of vehicle and weather conditions.

Back on topic - It does us no good to find the greatest deal if that great deal vehicle doesn't fit our requirements (use, budget, or garage).

wlbrown9 · April 2007

Might not have to wait until Summer...prices here in Memphis are running $2.70 - $2.80 per gallon already. Quite a run-up in the past month or so.

To me the largest difference would probably be the fuel mileage difference. My towing requirements so far have stayed under the 4500# limit of the lambadas. I was in the second row in a Yukon a couple of weeks ago. It had captain chairs in the second row and they were really roomy and comfortable. I'm thinking that seating comfort might be a little better in the Yukon vs. the lambadas...but I have yet to stop in and try them out. As far as exterior looks I like the lambadas better, in fact I don't like the looks of the current generation Yukon/Tahoe as well as the previous version.

I will wait and see what the GM CUVs do later in the year with gas prices up and more of the Acadia, Outlook and Enclave in the sales pipeline. Comparable discount would put the low end Outlooks and Acadias down to the $24K - $27K considering Yukons and Tahoes with $34-$36K MSRP being advertised at $30K or under.

paisan · April 2007

I was in the second row in a Yukon a couple of weeks ago. It had captain chairs in the second row and they were really roomy and comfortable.

Take a look at the Nissan Armada, lots of room, 4-wheel Independent Suspension, decent milage for the size, low financing rates and 9100lb towing capacity... They are significantly more roomy than the Yukon/Tahoes especially the 2nd row buckets

-mike
Motorsports and Tuning Host

wlbrown9 · April 2007

Mike,

Thanks for the info on the Armada. A quick looks seems to show that the bottom line might be in the same range as the Yukon...would have to do some comparison with certain options/features to see if there is any real difference. We has a first year Nissan Quest...good vehicle (for a mini-van :-) ). Only thing I did not like was the orange brake dust...clean it up and there it was again in 2 days :-(. How is that on the Armada? Also, how is the real life gas mileage? I know that was not your major reason for the Armada since you tow the race car.

Good day

bill

sdedmunds · May 2007

I wanted to know if toyota is having any specials for this memorial day? I looked online and it doesn't look like it, but I wanted to double check.

I'd like to get 1.9% on a new RAV4. I know mazda and subaru are giving out 1.9%, but I guess Toyota doesn't do that.

If Toyota will never have 1.9% on a RAV4 then does anyone know of a good AWD car with 1.9% or less APR this weekend. In the RAV4 or lower price range?

mussc · August 2007

Do you think Dodge/Chrysler will extend it's great rebates in the wake of it's lifetime powertrain warranty. I just looked on their website and they aren't offering ANY.

Do you think we missed the boat by not purchasing one by today? I could have gotten a new Dodge Crew Cab for less than $20,000 (over $10,000 off the MSRP)

As far as the resale price, why would anyone ever need to sell a Dodge if they have a lifetime warranty. They could always pass it on to their kids and keep it in their name. There won't be as many on the market, which will naturally raise the resale price eventhough the warranty is not transferable. Also if your engine and trans. blow, and you get them both replaced, that may also be a good time to sell.

dino001 · August 2007

Don't get too nervous. Sometimes it takes couple of days to post new rebates. Do you seriously think Chrysler products would sell without rebates in current environment?

wlbrown9 · August 2007

As far as the resale price, why would anyone ever need to sell a Dodge if they have a lifetime warranty.

Well, it is a Chrysler product :-). The POWERTRAIN does not cover a lot of expensive repairs that older cars might have. We had 2 Jeep GC Laredos in the early part of this decade. Power window motors, key switches, etc. kept going out. Not to mention the warped brakes every 10-15K miles, not covered under warranty after first 12K miles. Yep, it might keep running, but if nothing else works would you want to keep it?

mussc · August 2007

We'd just fix it. It would be a lot cheaper to pay $200 for new power windows than a $400 car payment every month. Just as long as I'm not spending $400 a month in repairs, I'd keep the vehicle. It will be like always having a new engine and tranny.

1racefan · August 2007

Hello,
I am looking to purchase a new Mitsubishi vehicle later this month. They had several rebates / APR offers for July, but as of yesterday, the only thing listed on their site is a $500 rebate if you attend a Mitsubishi sponsored event. At what point do you expect they will update their August incentives on their website?

P.S. - Looking at either a new Lancer or possibly a Raider (if the Raider has $4500-$6000 incentives again like I have seen in the past).

nortsr1 · August 2007

Any info on the above for the month of August would be appreciated.

oldfarmer50 · August 2007

It take up to 5 days for Edmunds to get some rebate info. The Mitsu site has delays also. Keep trying.

joel0622 · August 2007

9 months out of 12 Ford will tell us that incentives end on a certian date. Then when that date comes its like they have gone into the office and said "Oh Crap we have to come up with new programs." It is always slow.

sampson464646 · August 2007

Hello, I'm interested in a Chevy Surburban or GMC Yukon XL (2007) - anyone know if they will offer Zero percent for 5 or 6 years later this summer/Fall? Maybe Labor Day?

rlinn · August 2007

Hi - I have a car coming off lease at the end of the year and am starting to get early lease buyout offers from both my car manufacturer (GM - Cadillac) and competing dealers / manufs. (Toyota).

They typically offer to make the final 2 or 3 payments of your lease. Is there any way to find out if these incentives are coming out of the manufacturer's pocket of the dealers pocket?

If it is the dealer they really are not worth much....the cost will just be folded back into the negotiations and I'm better off waiting until my lease ends. But if it is the manuf. I could negotiate for a new car sooner.

If anyone knows where I can find this info please advise.

Thanks in advance!

Kirstie_H · August 2007

Better be careful - it might be out of YOUR pocket!

What is the manufacturer of the vehicle you're leasing? If it's GM or Toyota, then maybe one of the offers is legitimate. If GM or Toyota have incentives to the dealer to move certain vehicles, then the offer may also be legitimate, in that GM or Toyota dealers will still make money on the deal (from the manufacturer) even if they pay the remaining lease payments.

However, it is likely that your remaining payments will be "paid off" by the dealership, but tacked onto your next vehicle purchase, just like negative equity would be.

In any case, no way to determine anything without knowing your current vehicle, and what vehicle(s) you might be getting these purchase offers on.

rlinn · August 2007

Thanks for your reply! I am leasing a 2004 Cadillac Deville (DTS now). My lease runs out 12/07.

Thinking of buying another Deville/DTS or a Toyota Avalon. I have receive two lease payment offers, one from GM ("Pull Ahead" program) and one from Toyota, which looks like it came through the dealer.

My guts tells me the GM offer is manuf. funded, but the Toyota is a dealer funded offer. (since the letter said they would pay 'up to' 6 months of remaining lease payments -- I find it hard to believe Toyota corporate would eat that).

Any more comment/info would be appreciated. Thanks again!

Kirstie_H · August 2007

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

joel0622 · August 2007

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.

kyfdx · August 2007

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..

cali_driver · October 2007

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?

oldfarmer50 · October 2007

"...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.

jamesam · October 2007

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)

joel0622 · October 2007

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.

oldfarmer50 · January 2008

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?

joel0622 · January 2008

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.

oldfarmer50 · January 2008

"...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?

Rebates, Incentives, APRs - Questions & Comments

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