Incentives are often offered by vehicle manufacturers to encourage sales or to decrease inventory on particular models. These incentives come in the shape of direct cash back or low-rate financing offers. Manufacturer's rebates and low financing are handed to the buyer but dealer incentives are handed primarily to the dealer. This is not necessarily financially beneficial for the buyer as the dealer may not choose to pass the savings onto the buyer. Incentives can be anything between $500 and $2,000. They can vary according to different areas, and are not always available.

Timing is beneficial when buying a vehicle as it gives a better opportunity to take advantage of incentives. They are often on offer in late summer and early fall, when dealerships are keen to make way for incoming new models. Bear in mind that models have "life cycles" of about four years . After this, manufacturers will bring out a redesigned model, which is a good opportunity for a potential incentive. If you can recognize when the cycle will end, you can take advantage of the incentives. An incentive offered by a particular manufacturer is sometimes followed by similar incentives by its rivals. This can work to your advantage if you`re looking to buy a similar vehicle which does not have any current incentives. Incentives generally run for only a couple of months. You may not be in a position to buy a vehicle at the time of one incentive, but they often reappear frequently, sometimes for more than the previous incentive.

Customer incentives are advertised on the radio and television. These incentives are in the form of money or a reduced financing rate, or a mixture of both. They tend to be better advertised in a bid to attract first-time vehicle buyers, graduates or repeat buyers.

You'll need to choose either the cash back or lower financing rate. After that, you should analyze the cost of the vehicle with the incentive loan rate taken into account. If the loan is less with the lower financing rate than with cash back, you should choose that option. On the other hand, if you're looking for a bigger down payment, you can use the rebate for this. You should work out the overall cost of the vehicle, plus monthly costs, in order to choose the right option. Bear in mind that special finance rates usually only last for 24 to 36 months. This might save money in the long run, but can increase your monthly payments in the short-term.

Dealer rebates are in the form of money given from the manufacturer to the dealer to sell certain vehicles. These are not easy to foresee but can still be taken advantage of. Check the manufacturing date as the vehicle may have been in the showroom of over six months, in which case an incentive might be given to sell it, as it costs money to keep these kinds of vehicles in the lot long-term.

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