Finding the best car deal involves more than the vehicle’s sticker price. Car shoppers must decide if leasing is a good option and consider financing options if they want to own their vehicle. And what about other incentives dealers and manufacturers wave around to motivate buyers?
Read more to help understand what makes a good car deal.
Car Deals – What You Need to Know
Attractive car deals are designed to get customers into dealerships because automakers want you to buy a car from them. Potential buyers should be aware that advertised monthly payments and offers for cash rebates, no down payment, or low interest rates may have limited availability.
Read the fine print carefully to avoid disappointment. The special incentives might apply only to a small number of models with specific trim levels, for example. Similarly, lease deals and special financing rates might be offered only to people with flawless credit histories.
Still, car deals can help you save money while you get into your new ride. We want to help by compiling the best deals for you:
- Car lease deals
- Car finance deals
- 0% APR deals
- Cash-back deals
Most manufacturer discounts are for new automobiles, but you should check monthly deals even if you’re looking for a used car. CPO, or Certified Pre-Owned, vehicles often come with favorable incentives for buyers.
Car Lease Deals
Lower monthly payments are attractive to most vehicle shoppers and leasing a car is a viable option for some of them. It’s critical to understand the ins and outs of leasing before deciding if it’s a good deal for you.
Leasing might make sense if you drive around 1,000 miles or less each month. If you enjoy driving newer models every couple of years, leasing could be good for your lifestyle. However, you won’t build equity in the car you lease.
Unlike ownership, car leasing is like a long-term rental. The monthly payment is determined by many factors, including the vehicle’s depreciation – the value lost during the lease. In the end, you’re paying to use the car for a set period and not to purchase it.
For a good deal on a lease, expect to pay $100 to $150 at most per $10,000 of a new car’s price. At $40,000, that’s between $400 and $600. A vehicle with a lower MSRP will have a lower monthly lease payment. Be sure to include the required down payment, acquisition and disposal fees when figuring out the cost of leasing your next car.
Check out our full guide on car leases for more information.
Car Finance Deals
Most auto buyers finance their purchase with an auto loan. Whether you get financing at the dealership or through your bank or credit union, know that the best financing deals are reserved for customers with the best credit history.
Shop around for the best loan interest rates just as you shop for the best price on the vehicle you buy. There’s no rule of thumb for whether the dealer will beat your bank’s rate, or vice versa.
Go to your financial institution first to get their offer and then visit the dealership. If the dealer can match your bank’s rate, that’s great. If not, stick with the bank. Either way, you’ll have a great bargaining chip as you negotiate the car’s price.
Remember that no matter how good your interest rate is, never exceed your budget when purchasing a car.
0% APR Deals
Buying a car with a 0% loan is a good deal. It means you are financing the purchase of a vehicle and paying no interest on the money you borrow from a bank. A zero-interest loan allows you to pay the same amount of money as a cash buyer, even though you’re making monthly payments over a longer term.
There isn’t a downside to taking advantage of a 0% deal. The catch is that not everyone can get that offer. Advertisements for 0% financing get car shoppers into dealerships. Only people with the highest credit scores will qualify for a loan with no interest. Buyers with average or poor credit histories will discover they don’t qualify, so it’s a good idea to check your credit score before car shopping.
Cash Back Deals
Auto manufacturers have historically offered rebates and cash-back incentives to attract car buyers. The automotive industry has shifted recently, as the COVID-19 pandemic has nearly eliminated the need for car makers to lure customers to dealerships.
Still, knocking off some money from the sticker price grabs a car shopper’s attention. But is a cash-back incentive a good deal? It can be, but there are things to consider.
- Rebates are often placed on hard-to-sell models to make room for in-demand new cars.
- Some expert car buyers will tell you that cash-back offers make it harder to negotiate a lower price at the dealership.
- Cash back does not mean discounted price, so you will pay tax on the car’s negotiated price before the rebate.
How to Finish Deal/Complete the Car Deal at Dealership
After you’ve located a car to buy, found the best financing offer, and thoroughly researched available incentives, it’s time to negotiate the deal. Be reasonable while negotiating and expect your dealer to do the same.
The deal isn’t done until the paperwork is signed. It is crucial that you review everything – and understand it – before signing anything. Avoid paying any hidden fees. Ask questions and be comfortable with the answers you receive.
How to Choose the Best Deal for You?
Everyone has different situations and circumstances. The best deal for your neighbor might not be the best deal for you. The ideal time to buy a new car might be when you absolutely don’t need to buy a new vehicle.
If you need a new ride immediately, you’ll have to select from the available inventory, accept the current loan APR, and settle for whatever manufacturer incentives are offered.
Buying a car can be a complex and stressful process for many people. It’s a good idea to take one step at a time and carefully make decisions based on your needs. Always remember the most important piece of advice: Don’t buy a car that is beyond your financial means.
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Questions Asked by You, Answered by Us!
How do cash back car deals work?
Cash-back offers from manufacturers are used to get potential buyers into dealerships. A fixed amount of money or a percentage of the car’s price is deducted when the paperwork is done, reducing the overall amount the buyer must pay.
What does 0 APR mean?
APR stands for annual percentage rate. A 0% loan lets you finance the purchase of a car without paying interest on the money you borrow. Paying zero interest on a loan lets you pay the same amount of money as a cash buyer, even though you are monthly installments over a longer term.
How to get the best car finance deal?
The best car financing deals are reserved for buyers with excellent credit. All buyers should check with several lenders to find the best interest rate they can qualify for before going to a dealership.