Incentives help reduce the cost of a new car but they’re only available for limited times.

Everyone likes getting a break on the price of a new car and one way to do so is through dealer incentives. Here’s a quick guide to common incentives and how to choose between dollars off and loan-interest financing.

What’s a dealer incentive?

Financial incentives offered to consumers by auto dealers and take several forms. The most common are cash rebates, special financing terms and more attractive lease terms. Dealers use the incentives to drive sales. For auto buyers, incentives can take thousands off the cost of buying and financing a car.

When can you get a dealer incentive?

Dealer incentives are not always available. Manufacturers use them when they want to move a particular model. When incentives are offered they’re often timed to coincide with the introduction of new models so dealers can move existing inventory, or they’re introduced at month-end or year-end to help dealerships meet sales goals.

You may also be eligible for incentives if you’re part of a designated group. Many dealers provide incentives for military members, recent or soon-to-be college graduates and handicapped and disabled drivers who use adaptive driving aids, as well as cash-back offers up to $1,000 for returning buyers.

Some dealer incentives are designed to lure customers currently driving a competitor’s vehicle. For example, when this article was written, Ford had a lease offer designed to entice current Jeep customers to lease a Bronco Sport.

Remember, dealer incentives only run for limited time so pay attention to offer dates when planning your new car purchase. There’s no way to know if or when incentives will be offered again.

How do you find out about dealer incentives?

Dealers promote incentives in their advertising and on their websites. You can also ask about them at the showroom or check manufacturers’ websites for current incentives.

When viewing manufacturers sites, take note that some incentives are tied to a specific geographic area. Verify that any special offers are available where you live. Also, some credit offers require a minimum credit score to qualify.

Choosing between dollars off or low-interest

Often, car buyers have a choice between dollars off or low-interest financing. The only way to know which is right for you is to run the numbers; it’s easy to do with our car loan calculator.

Taking the rebate means lowering the overall cost of the car while subsidized financing helps lower monthly payments. Car buyers with high credit scores often take the rebate from the dealer and get a competitive auto loan from a third-party lender like Consumers.

When considering low-interest incentives, be sure to consider the loan term; many are for 60 months but repayment periods may be shorter. The shorter the repayment period the higher the monthly payment.

Keep your eye on the total cost

It’s easy to spend more than intended on a new car unless you look at the total cost of ownership. For sure, calculate the savings from dealer incentives but also tally the total purchase and financing costs, insurance and maintenance.

If you find the cost of a new car is out of reach even with incentives, consider a certified pre-owned vehicle. These vehicles must pass a manufacturer or dealer inspection and they often come with warranty coverage.

Consumers has loans for new and used cars

When you’re ready to buy a new or used car, check out a Consumers auto loan.

 

All loans subject to approval. Rates, terms, and conditions are subject to change may vary based on credit worthiness, qualifications, and collateral conditions.