Auto Loans - Seizing The Incentives

You should take advantage of these incentives given that you need to resort to car loan financing. That way, you will at least get something back for the thousands of dollars you will be paying for financing the purchase price of your desired car or vehicle.

There are different types of incentives, not all lenders and dealerships offer them but chances are you will at least be able to get one of them provided that your credit situation and finances are suitable for a car loan approval.

Nevertheless, make sure that by offering an incentive the lender is not concealing disadvantageous loan terms like a short repayment program, less than 100% financing, higher rates, etc.

Cash Rebates or Cash Back

Cash returns can range from a couple hundreds to several thousands dollars depending on the purchase price of the vehicle and thus, the amount of the car loan. The average rebate goes around $1000 which is good enough to attract many customers and get them to choose the financing alternative proposed by the dealership. An interesting fact is that both dealerships and manufacturers often offer these incentives when they have excess inventory and fill compelled to reduce it by selling more.

Therefore, it is easier to get higher cash rebates in dealerships located in high populated regions where a particular car model has been overproduced and both the manufacturers and dealerships are eager to get rid of them. Higher price cars offer the best rebates or cash returns but beware of tricky dealerships that inflate the price and then feature a high rebate. Make sure to compare prices before accepting any offer.

Lower or Promotional Rates

Low rates are another interesting offer that dealerships and lenders make in order to attract customers. The offers vary and there is no standard to state in order for you to be prepared. However, discounts of up to 2 or 3 points are common and sometimes can be as low as 0% for a certain period of time because along with reduced rates, lenders also offer grace periods, promotional periods of reduced, subsidized or null rate, etc.

It is also possible to obtain both the rebate and the promotional rate. It all depends on how desperate the dealership or manufacturer is on selling a particular model that has been overproduced. Therefore, the smart thing to do is to compare what different dealerships and lenders have to offer in order to make conscious and well informed decisions when picking a particular lender or dealership for financing your vehicle.

The Best Deal?

Deciding whether a rebate or a reduced rate is the best option is entirely up to you and your financial situation. If you want overall savings, chances are that a lower rate will do the job, while a rebate can let you schedule your repayment and get lower monthly installments that will be significantly more affordable. But you can get a bit of both benefits with either a rebate or a reduced rate and the combination of both will boost the results. Therefore, it is entirely up to you.

Mary Wise, a professional consultant at with twenty years in the financial field, prevents consumers from falling into the hands of fraudulent lenders. In her website you will find more useful tips and interesting financial articles on this and many other related topics.

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