Trying to evaluate and decide between the various deals and incentives offered by competing car dealerships in your area can be challenging. How can you really be sure if you will benefit more from one promotion over the rest?
When it comes to choosing a deal, your best bet is to gain a solid understanding of how each type of incentive works, then evaluate your own situation in order to determine which promotion will save you the most money.
Common Automotive Incentives
If you search the internet, watch television commercials or read newspaper advertisements, you will notice that the majority of dealerships are offering three types of incentives. Dealers typically entice potential buyers with Factory Rebates, 0% Financing or No Money Down offers.
- Customer Cash:
These offers come directly from the manufacturers and are meant to encourage customers to purchase a particular vehicle model. More often than not, buyers use these "rebates" as down payments. Even if you have a trade-in car and/or a reasonable down payment saved up, you can ask the dealer to subtract the rebate amount from the vehicle's total price. This way, you end up financing less and saving more money on interest charges down the road. Conversely, a handful of car buying customers actually request that their rebate come to them as checks that they cash and use for non-vehicle related purposes.
- 0% Financing:
You will often see this deal as an alternative to a factory rebate. You can usually have one or the other, but not both. For a buyer who is thinking long term, the idea of paying no interest on their auto loan can seem quite appealing. However, if you are a customer who has a credit rating that is good enough to qualify you for the 0% financing incentive, there is an excellent chance that your "regular" APR would be fairly low. Find out exactly what your interest rate would be and how much you would pay in finance charges over the life of your loan. You may discover that the rebate being offered is worth more than what you would save with 0% financing.
- No Money Down:
"No Money Down, Sign and Drive" sounds like an easy and convenient way to purchase a vehicle. And if you have immaculate credit and disposable income, there is no reason why you shouldn't buy your car this way. However, if you are on a budget, want to save money and your credit rating is a little bumped and bruised, buying a car with no money down may not be the best option. Providing a down payment on your vehicle purchase will both build equity and allow you to finance a lower amount. This means that you will be less likely to accumulate negative equity and ultimately pay at least a little less in interest charges.
It should be noted that, unfortunately, not everyone qualifies for these advertised deals and incentives. Before doing any serious car shopping, it is a good idea to check your credit reports so that you know where you stand with your credit. And even if you discover that you have moderately to severely damaged credit, you can still get a fair deal on a vehicle and an affordable auto loan. You just need to know where to look.
Good Deals for Bad Credit
Drivers Lane has been helping car buyers with credit issues for nearly two decades. We work with special finance dealers all over the United States and Canada, and we will connect you with a qualified dealer in your area quickly and easily. You will get the best deal possible on your next new or used vehicle by just filling out our fast and secure online application. You may even have the option of buying your car with little or no money down. Get started today and you may be driving tomorrow.