The Best Car Deals: Low Finance Rates Vs Rebates. Which Should You Choose?
October 26, 2021
How to understand rebates and low-interest financing offers
Vehicle MSRP: Manufacturers Suggested retail Price – This price can be negotiable. Never agree to pay MSRP
Exception Some vehicles might be difficult to find or limited in production and might be sold at MSRP, or sometimes even higher.Market Adjustment is commonly used for this.
Manufacturers Rebate: These are your funds and have nothing to do the dealership’s discounts.This money comes directly from the factory.The dealer should not use the rebate as a bargaining tool.Any rebates or discounts offered by dealers should not be combined with any negotiation or discount.
Low finance rates: 0.00%, 1.00%, 1.9%, etc…These rates are known as Sub-vented rates and are also offered by the factory, not the dealer.Dealers should not use a low finance rate as part of any negotiation.These rates are not subject to any rebates or discounts.
Exceptions There are many exceptions to sub-vented finance rates. But here are two you should know:
1.These rates are not available to everyone.If you think you may have an issue that might prevent you from qualifying, you can tell the dealer and let them know.Although this may seem unusual to many dealers, it is not uncommon for good dealers to allow you to submit your application first.Why is this important?We always emphasize the importance of preparation and knowledge to avoid overpaying at a dealer.What happens if you have completed your deal, negotiated it and signed off on it with the dealer?Next, you go to the finance office to finalize your finance terms and payment… Then at the last moment you are told “Sorry” that you don’t qualify… NOT GOOD ALL THE DEAL CHANGES.
2.Combining rebates and “low” financing rates is not possible.Some factories will allow you to combine rebates and “low” finance rates at times. However, there are no rules. You must first do your research.Chrysler, for example, offers rebates to manufacturers on all their vehicles. They also offer low financing rates on most vehicles.You can’t have them all, but you must choose which offer you prefer.Sometimes, Chrysler offers special deals that allow you to combine both financing and rebate offers.These offers may not be available from all dealers. If you don’t know and agree to higher finance rates, you will be stuck.
Commonly Asked Questions: Which is the right choice, Rebate of Low Financing?
This is a great question that many customers ask. The answer is simple, but many people don’t know.
Keep this in mind: Always do your best, don’t ever ask for help from a dealer or person who has other motives than your best interest.
This means that if you ask a dealer which dealership makes more sense, they will most likely tell you “Take the rebate, not the low rate of interest.”
This is because if you choose the low interest rate, you will actually pay “less” for your vehicle if the rebate is taken.The vehicle’s price is the most important factor, so you should always get the rebate.This is correct or false.
Rule: It doesn’t matter what the dealer makes or loses, it’s irrelevant to what is best for you.
Is the dealership more likely to profit if the rebate is chosen over the low financing rate?Yes, the dealership stands to gain more.If you choose conventional finance rates, they get a little bit more “reserve money”.This point is irrelevant.What does the dealership make?Is that really so important?Are there rules that say a dealership cannot make profits?This scenario shows that you are the only one who is wrong.You are asking the wrong person for information.If the dealer is not honest and gives an answer that might make him or her less money, it’s likely that the answers will be carefully weighted to favor their side.