not just what the dealer paid for the car.

Two very different amounts, I assure you.

This knowledge will certainly strengthen your position when it comes to making offers and counter offers throughout the new car deal process and also a starting point from which to present your offer to the dealer.

Knowledge definitely worth the time and effort.

Cash back, incentives, rebates have become just as much a part of the deal as the car itself… maybe more.

Manufacturers and dealers will be even more creative in their marketing by offering ‘special financing‘ and your choice between cash back and special discount pricing and financing. These programs are beneficial to you the buyer. If you know about them. And, at least ostensibly, not designed to deceive you.

It’s simple competition for your dollar.

Having said this, you should also keep in mind when it comes to marketing techniques such as special low interest financing, the dealership is simply taking the rebates from the manufacturer and giving to the finance company in what is commonly called ‘buying down the interest rate’.

Yes, it’s true that this may very well could have been money back to you, but using to buy down your finance rate isn’t all that bad.

The point here is that the dealer isn’t that magnanimous with his own money. It was probably yours in the form of a rebate.

From a marketing perspective, factory rebates open up a whole new arena of creative marketing ploys. Don’t necessarily rely on the salesperson or the dealer to offer up this money and automatically put it on the table… you need to know this… remember.

Also, a great rebate offered and car dealer incentives shouldn’t be the sole reason you go after a particular car.

A great rebate attached to a poor deal is still of bad value to you.

Some tips on finding the right car next…

The dealer cost or the dealer invoice is usually fairly close to what the dealer actually paid for the cars on their lot.

However, these invoices don’t always tell the whole story about what the car ultimately cost the dealer.

This is because the auto makers very often offer dealer incentives or discounts to the dealer for purchasing the auto maker’s cars. This is how dealers can sometimes advertise and sell their cars at what they tout as “at or below factory invoice prices”!

This really should fly in the face of your intelligence.

Think about it.

What business in the world could last selling their product at the price that they bought it for! C’mon do some hypothetical math. How long could a grocery store pay the rent on their building, pay their employees a wage, their taxes, the utility bills, and on and on if they pay their supplier $5 for a case of beans and sell that same case of beans for $5????

They CAN’T.

Wait, let me restate that. They CAN’T and they WON’T!

And by the way, neither would you. So, this marketing crap, at or below invoice, or just $50 over factory invoice just shouldn’t fly in your mind.

Yeah, how many cars at just $50 over what you paid for them would have to sell just to pay the monthly payment on your multi-million dollar building that you sell these cars from?

Sure the invoice that the dealer shows you (if you can get them to do so) may be on paper what the dealer paid for the car, but it is probably far from what the car’s net cost to the dealer will actually be.

This should tell you that the money coming to the dealer in the form of factory to dealer rebates and incentives can be quite extensive. This is why the MSRP sticker on the window of the car is just an asking price subject to you rolling up your sleeves and negotiating it.

Just about every car comes to the dealer with some type of dealer incentive on it. And every car comes to the dealer with what automakers refer to as ‘holdback’. Holdback is essentially a refund to the dealer from the manufacturer after the dealer sells the car. Usually around 1 to 3 percent.

Unlike the rebates and incentives that dealer receive from the auto maker that may be passed along to the buyer to entice them to buy, you’ll not see holdback ever offered up as a bargaining chip.

Holdback is indeed an interesting animal here is more on dealer holdback.

By now it should be perfectly clear to you as to the importance of doing some research and getting a pretty good idea of money figures involved in dealer invoice, new car incentives and rebates, factory to dealer rebates, and at least be aware of holdback, before you go out and play the negotiating my dollars shell game.

And with today’s internet and websites available to you, there really is no excuse for you not getting this information under your belt before you head out. And just because you may have this information, it doesn’t mean you’ll be able to get the car deal of the century.

But, without it, I would almost guarantee you’ll pay more than you had to.

Next Auto Dealer Incentives

Although not all encompassing in this short article, I’ll hopefully give you a basic understanding of, and help you understand how to locate the specific car that you want, and then obtain a price that is fair to you and the dealership.

For our purposes here, I will assume that you have done plenty of research and are comfortable with which car best fits your needs, you budget, and hopefully comes close to satisfying the ‘want’ factor.

If not please stop now and go get your research done on getting the best car deal you can.

Buying a car is obviously a big investment for anyone, so you’ll want to be sure to narrow your search to exacting calculations down to the options and packages you want on your car. If you take the time to get this done up front, I think you’ll turn the car buying process into an exciting and satisfying project, especially when you reap the fruits of your labor with a good car at price within your target range.

One of the big advantages on your side as a potential car buyer is the competitiveness of the new car market today.

And, the car market competition breeds car buyer incentives from the vehicle manufacturers and the car dealers. As with any market, demand will drive supply and price. So, you may find that the cars with the greatest incentives are the ones that may not be selling at such a brisk pace on their own. Of course, the inverse may be true too.

Let’s talk briefly about incentives or the added reasons the automobile industry gives you to purchase their cars.

Most often you’ll see these car buying incentives in the form of either cash back or special financing.

The cash back is the easiest to grasp. If a car is selling for $25,000 and the manufacturer is offering $2,500 cash back the net selling price offered would be $22,500. Easy enough to understand. Now let’s use those same numbers as they would apply to special financing incentives and plug them into a monthly payment calculator.

If you financed the $22,500 at 6% for a loan term of 5 years, your monthly payments would be about $434.99. If the manufacturer was offering this same vehicle price but with a 0% interest rate for the 5 year term of the loan then your monthly payment would be approximately $375.00. That’s a monthly payment savings of $59.99 every month. Over the life of your car loan that adds up to a very substantial savings of $3599.40 for you.

With car incentives it is important to note that they probably won’t apply to all models (probably the most popular models). Also, the car incentives may not be offered in all regions of the country.

Remember earlier we discussed that incentives are mostly driven by the market forces. Furthermore, in order to take advantage of most of these incentives, your credit rating will have to probably be good to excellent.

Also keep in mind there are also ‘hidden’ or unadvertised dealer incentives that are paid directly to the dealer from the manufacturer in order to move certain cars. With a bit of research from a distinctive website such as Edumunds.com, you can ferret out these ‘dealer cash’ incentives and keep the advantage in your court.