A tutorial on incentives:
Regarding typical product lines-Mfgrs incentivize their lines (beyond the token $500-$1000 which is just there to give "something" to the customer and to help sop up the cost of sales tax in getting the deal financed) for 5 reasons:
1- To guide and influence sales in a general direction-primarily to lower the XX days supply of any one vehicle line
2- To achieve some particular sales goal in the line (Years ago Ford put out HUGE rebates on F-150s when they were in danger of losing their "best selling truck" status. HUGE rebates. Customers thought holy heck they are only going to get better and waited. The second that they had achieved their sales goal they slashed the rebates many customers lost out thousands by waiting while others got prices they have not seen since)
3-At transition to the next model year (model years change for different lines at different times for manufacturers in the industry. Only research will show you when) as Dealers do not like having a mix of different model years on their lots-it takes focus away from the customers. End of model year clearance is usually done in Summer to bring all the advertising together.
4- In general to help sales
5- In accordance with a regional AUTO SHOW to help sell cars that the auto show drove traffic to the showroom to see.
Caveats: incentives are usually only used on vehicles that need them, hard to find, realtively rare or low production vehicles will not be eligible. Sports cars, vanity pieces tend not to be incentivized as the people can either afford it or not and Dealers/MFGRS do not like cheapening the brand.
0% tends to be offered, usually with a rebate mix. Usually you get a large rebate and your own financing, or a smaller rebate and preferred financing or very little rebate and zero percent. You need to do the numbers yourself and see what works for you.
REMEMBER:
-buying a last years highly rebated model when this years new model is on the showroom floor will save you money in rebates right now but you WILL LOSE RESALE value as you suffer a greater depreciation. Even though its a new car its simply an "older" new car.
-the new model year will not at the same time have the incentives that the old model year has.
- end of model year clearance is exactly what it says, The factories have started producing the next model year and they are no longer producing the one that is incentivized. This means you may not find the exact vehicle configuration and color that you want and you may have to compromise on what you want to get the price you want. You need to have open choices. Its like buying Valentine's Day Candy on the 15th.
Message Edited by usmc58555 on 02-20-2009 07:36 AM
