Manufacturer and dealer incentives

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Updated: 3/28/2003 12:53 pm Published: 3/28/2003 12:53 pm

Incentives and rebates are programs offered by both vehicle manufacturers and dealers. They may be offered to increase the sales of slow-selling models or perhaps to reduce excess inventories. In some cases, the salesperson might not be aware of dealer incentive money, so buyers can benefit from speaking to a sales manager about the specifics of the inventive program. Dealers may offer cash rebate incentives or a lower interest rate if you agree to do your financing through the dealership. Sometimes dealers will give you a lower interest rate in exchange for a shorter loan term. For example, they might offer you a 3.9% interest rate if you finance for 36 months, or a 4.9% rate if you finance for 48 months. On occasion, dealers or manufacturers will give you the choice of a low annual percentage rate or a cash rebate. While dealer and manufacturer incentives have similarities, they also have differences. For example, manufacturer rebates are passed directly to the buyer, while dealer incentives are passed only to the dealer. The dealer may then choose whether or not to pass the savings on to consumers. For this reason, it is in your best interest to investigate any potential manufacturer and dealer incentives before you go to the dealership. It will give you another useful bargaining tool when purchasing a vehicle.

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