Understanding new car rebates and incentives

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It seems like every other car commercial is talking about special rebates and incentives that are currently being offered. There are also a number of additional incentives that are not always advertised. Understanding what these are and how they are applied can help save money on your next new car.

Most incentives are offered by the manufacturer or the manufacturer's finance company (not the dealership itself) in order to increase sales volume. These can be offered directly to the consumer or to the dealer who sells the car. We’ll examine each in turn:


Customer Incentives

Customer incentives are rebates or subsidized lease or financing rates that are offered to qualifying purchasers of a new vehicle. It’s worth noting that “rebates” are typically applied to the closing costs of the new car—the client doesn’t actually get to walk out with the money in hand. While many rebates can be combined, you typically can’t combine a rebate with a low financing offer. If you’re eligible for both, you’ll have to decide which is more advantageous for you.

  • General rebates – Customer rebates offered to anyone who buys or leases a qualifying vehicle.
  • Loyalty rebates – Rebates offered to customers who already own a vehicle from the same manufacturer (e.g. current Toyota owner who buys a new Toyota).
  • Conquest rebates – Rebates offered to customers who already own a vehicle from a competing brand (e.g. current Audi owner who buys a new BMW).
  • Recent Grad/Military rebates – Rebates offered only to recent college graduates or current members of the military.
  • Low interest financing – Low interest rates offered to well-qualified customers. These can significantly reduce the amount of interest paid on the loan and, therefore, the total cost of buying the vehicle.
  • Lease specific incentives – Rebates or special financing rates specifically for clients who are leasing their new vehicle.


Dealer Incentives

Manufacturers will also give dealerships their own incentives (known as “dealer cash”) that reduce the price the dealership pays the manufacturer for the vehicle. These can vary—some may be model-specific, others kick in after a certain sales quota is met, or are offered in exchange for taking on additional inventory.

Dealerships are under no obligation to pass these savings on to their customers, but they may be willing in order to move a slow selling vehicle or to boost their sales volume past a target quota.


Government Rebates

In addition to manufacturer rebates, there are also rebates offered by the government to encourage the sale of hybrid and electric vehicles. Unlike manufacturer rebates, these are applied for after the vehicle is purchased and are received in the form of a tax credit or a check. (See current rebates available in California.)


Understanding which rebates and incentives you qualify for can help you save additional money off the price of your new car. Most manufacturers' websites will list the current customer rebates available on each model and any loyalty or conquest offers they have. Your Cartelligent agent can also help you understand which specials you qualify for and uncover hidden dealer incentives so that you can take advantage of all available offers.


Regardless of what incentives are currently being offered, Cartelligent can help you get a great deal on exactly the new vehicle you want. Call our team of car-buying experts at 888-427-4270 or get started today.