FAQs

Frequently Asked Questions (FAQs)

 

1. I saw a great lease deal on a new Honda Accord last month, but it’s not there this month. What happened?

Car manufacturers such as Honda offer special leases and other incentives on a monthly basis. Each month, the old incentives expire and are replaced with new incentives. Sometime the old incentives are not as good as the old ones, or vice versa. So, if you see a good deal, it’s not a good idea to wait until next month in hopes that the deal will get better.

2. Why do car manufacturers make you choose between a low-interest loan (or 0% loan) OR a rebate? Why not both?

Car manufacturers actually lose money on incentives such as low-interest loans and rebates. However, they try to lose as little money as possible. Therefore, they don’t allow customers to combine incentives. Customers must choose the the incentive offer that best suits their needs. In general, if you need down payment money, a rebate is better. However, you should always compare monthly payments both ways.

3. Can I buy a car for less than a dealer’s invoice price?

Certainly. But you’ll need the help of the car manufacturer to do it. If the manufacturer is offering a direct factory-to-customer rebate combined with a “hidden” factory-to-dealer rebate, and assuming you can negotiate an additional price discount from the dealer, there is no reason that you cannot get an “out-the-door” price that is actually below a dealer’s invoice price. Getting free price quotes from online car pricing services such as TrueCar will give you an instant answer to which local dealers are offering the lowest prices.

4. What is the absolute cheapest way to buy a brand new car?

Simple. Watch this web site, along with car manufacturers’ web sites, for special promotional deals. Promotions usually are only good for one month, so act quickly if you spot something that interests you. These monthly incentives from manufacturers allow you to buy (or lease) cars at better deals than you could ever negotiate for yourself.

5. Which car company has the best deals?

Wow, that’s hard to answer because in any given month one car manufacturer can have better car deals than others. Then the next month, another manufacturer may have better deals. You need to simply keep a watch on this website and on manufactuers’ websites to determine who has the best deals during the month that you want to buy or lease.

6. Is $199 a month a good car lease deal?

Maybe. Maybe not. It depends on other factors such as the sticker price of the car, capitalized cost, lease-end residual value, money factor (finance rate), down payment, and fees.  You can use the Lease Evaluator calculator in this Lease Kit to evaluate any car lease deal.

7. Will a 0% APR loan deal save me money?

Yes, definitely. However, it might not save you as much money as a rebate, assuming a rebate is being offered and the rebate is large enough. You must take one or the other, not both. See the following article for more details, “0% APR Loans – Good Deal or Not?”

8. Why is it harder to get a good deal on a luxury brand such as Acura, Mercedes, Infiniti, Lexus, BMW, and others?

These brands don’t want to be viewed as “discount brands,” which means they don’t typically have big sales promotions, advertise heavy rebates or discounts, or engage in competitive price wars. Any special deals will come in more subtle forms, such as hidden factory-to-dealer cash, low-interest loans, or “loyalty” cash.

9. What’s the best time of year to get the best car deals?

In the old days (just a few years ago), the best time was in the Fall of the year when new models were coming out, or around holidays when sales were slow. Now everything is different. Car companies introduce new models throughout the year, not just in the Fall. And competition is so fierce that monthly promotional deals (rebates, 0% loans, etc.) are now offered all month, every month of the year by nearly all car companies.

10. Will I be able to get a better new car deal by requesting car price quotes online from web sites such as Edmunds and TrueCar?

Generally, yes. The Internet Sales department, who handles online price requests at most dealers, allows you to skip much of the game-playing sales tactics of in-your-face on-floor car sales people. You’ll get the dealer’s best price a lot faster and a lot easier since it is done online and by telephone. By requesting quotes from different sources or different dealers, you can easily get multiple prices to compare and choose from.

11. Do I need a good credit score to get promotional new-car incentives such as rebates and low-interest loans?

You need a good credit score to get low-interest loans and special lease deals but not to get rebates and price discounts. If you don’t know your credit score, you should. You can get your scores online from a number of companies such as FreeCreditScore.com.

12. Are last year’s leftover car models good deals?

Absolutely. When dealers have leftover cars on their lots, they need to get rid of them to make room for the newer models. They and car manufacturers offer rebates, low-interest loans, and special lease deals to make the cars attractive to customers. Since styles don’t change much from year to year, leftover cars are good values.

13. A dealer offered me a car lease deal. How do I know if it’s really a good deal or not?

Basically, if a dealer put together the lease deal without help from the car manufacturer or regional distributor, it’s not a great deal and no better than average. However, if you see a lease supported (subvented) by the manufacturer, it’s nearly always at least a good deal and often an excellent deal. You can evaluate any lease deal offer with the Lease Evaluator, which is part of the Lease Kit from LeaseGuide.com.

14. If I can’t find any manufacturer rebates on the exact car I want, what can I do to get a good deal?

Since dealers can only negotiate price (loan interest rate and other factors are set by dealers’ finance companies), take advantage of free online car pricing services such as TrueCar. You can get the lowest prices this way, often less than dealer invoice — much better prices than you could negotiate for yourself.

15. If I can’t find a 0% APR loan or other low-interest loan on the car I want, what can I do to get the lowest and best interest rate?

Your options are limited because dealers have little or no ability to control interest rate charged by their finance companies. Some dealers markup the finance company’s rate by up to 2% but it’s almost impossible to determine if this is the case in a particular situation. Your best strategy is to know your credit score — so that a dealer doesn’t unfairly charge you a higher rate than your credit score deserves. Check your score at FreeCreditScore.com — the higher your score, the lower the car loan interest rate you should get. If you find that your credit score is not so good, you can check for good rates at a loan company, such as Auto Credit Express, that specialize in providing car loans to “sub-prime” borrowers.

16. If I can’t find a special manufacturer-sponsored lease deal on the car I want, what are my alternatives?

In the absense of subvented manufacturer lease deals, you’ll want to lease a car with a highly discounted price (see TrueCar for low price quotes) and high residual value — which creates a low monthly lease payment. You can find a list of vehicles with the best and worst residual values in the Lease Kit .

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