After tallying up September 2008 new car sales, automotive manufacturers quickly concluded that waiting until December to run calendar year ending sales just wasn’t going to cut it, especially if they were to salvage something positive for the year. Bad news for manufacturers spells good news for consumers, especially for those new car buyers who can pay cash or have the credit to buy a new car.
Finding an excellent deal won’t take much effort as everyone is offering some sort of incentives right now including low rate financing, cash back, or both. Instead of focusing on specific deals, let’s take a look at some of the incentives currently being offered:
Cut Rate Financing — Zero Percent Financing remains one of the biggest draws for consumers and can be an excellent way for people to finance their cars. The finance arm of the automotive manufacturer will get you into a car and offer a loan from 36-60 months interest free (in a dwindling number of cases you may be able to find a 72-month term loan). Most new car loans for people who have excellent credit carries an interest rate between 6-7%. This means that if you finance a $20,000. car loan for 48 months at zero percent interest, then your monthly payments would be $416.66, a savings of $60 per month compared to the prevailing loan rate of 6.5%. Over the life of the loan, you’d save $2880 in interest payments.
Cash Back – Instant savings is a huge appeal for some customers, especially those who have arranged their own financing or have the money to buy their car with cash. Any cash back offer that exceeds the savings of a special financing deal should be given consideration with even greater savings possible for people making an all-cash transaction. Typical cash back is at least $1000 right now with certain Jeep, Ford, and other truck models offering rebates of $4500-$7500.
Both — In some cases, an automaker will offer buyers a combination of cash back and cut rate financing. Large SUVs and big pickup trucks will sometimes offer both, but check the fine print: oftentimes the financing rate is higher and the rebate lower.
Which Offer Should You Take?
An automotive calculator can help you determine the best financing option for you. In addition, you may find that leasing offers a better deal, therefore compare lease/finance offers before heading off to your local dealership.
Though car makers are offering historically fantastic deals right now, those offers may not last especially as each company gets inventory trimmed down to meet customer demand.
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