FAQs – Frequently Asked Questions

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 Edmunds will give you an instant answer to which local dealers are offering the lowest prices, which will included manufacturer incentives.

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. Here’s a list of the car companies who offer the best lease deals.

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

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 an excellent credit score to get low-interest loans and special lease deals but not to get rebates and price discounts. Of course if you need a loan, your credit score will affect your payment. If you don’t know your credit score, you should get it before going car shopping.. What’s your FICO® Score? Find out now with a purchase of your Experian Credit Report for $1 with enrollment in Experian CreditWorksSM!

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 Edmunds. 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. See your Current Credit Score & Report Now with TransUnion®
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 Edmunds  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 .

17. What car brands have the most incentives and special deals?

American car brands such as those from Ford, General Motors, and Chrysler generally have the most frequent and best incentives, especially rebates and 0% APR loans. Japanese brands typically have selective incentives on some models and styles, usually in the form of special leases and low interest rates. Deals on Japanese luxury brands such as Lexus, Acura, and Infiniti are harder to find.  European bands such as Mercedes, Jaguar, Land Rover, and Audi don’t offer good incentive very often. BMW is an exception because they offer some of the best leases in the business. Volkswagen also offers some incentives, although not great.

18.  I found some great incentives on the car I want. Should I wait until next month to see if the incentives get better?

It’s usually not a good idea to wait. If the incentives on your car is good this month, it might get a little better next month. But it’s more likely that the incentives will be worse or will disappear altogether. So, if you like the car and the incentives don’t take a chance by waiting. Do it now.

19.  Are car incentives just a scam on the part of dealers? What’s the catch?

No, car incentives are offered by car manufacturers through their dealers, and are perfectly legit. Manufacturers actually lose money on the deals but it helps them get customers that might not have otherwise bought from them. These are genuine good deals and are not scams. However, if there’s a catch it’s that incentives are usually only offered on selected models and styles. You have to buy those specific vehicles if you want the deals. To get current prices that include manufacturer incentives, see Edmunds.com.

20. I saw some great incentives on your web site on the car I want. When I went to the dealer, the deal was different? What’s going on?

Car manufacturers have what they call “national” incentives that are good all over the U.S., and they also have “regional” incentives that can vary from one region of the U.S. to another.  Some of the deals we report are regional deals and are only representative of actual deals than a customer might find in his region. Usually the differences between regional incentives are small.

21. Are luxury car leases good deals?

In general, luxury car leases are better than average, because residual values are usually higher (as a percentage of MSRP). Special manufacturer-sponsored promotional lease deals are especially good, in particular those from Mercedes and BMW. Those two companies frequently offer incentive leases that rate Excellent or Outstanding.

22. What are “sign-and-drive” car deals? Are they worth considering?

Sign-and-drive deals are usually lease deals. It means that you pay no money at the time of lease signing — no down payment, no security deposit, and no first month’s payment. If the deals are being offered by the car company, such as Ford or Honda, it’s usually well worth considering. If being offered by a dealer without his car company’s help, probably not. To determine if it’s a car company offer, go to the car company website and find the deal in the “Special Offers” section. Or check with Edmunds, especially if you want to compare different cars.

23. The car I want has both a promotional lease deal and a cash-back rebate (or 0% APR loan rate). Which is the best deal?

Promotional lease deals are nearly always better because three different factors are adjusted to make the deal: vehicle price, money factor (finance rate), and residual value. The combined effect of three adjustments outweighs a single factor adjustment such as rebate (price adjustment) or 0% APR (finance rate adjustment).

24. I got a bad deal on my new car. Can I trade and get a better deal on a new car?

Maybe. But it depends on the trade value of your car and the amount remaining on your loan or lease. In most cases, you will “upside down” on your loan or lease, which means you owe more than the car is worth as a trade-in. If the difference, called negative equity, is not excessive, you have a good chance of being successful with your trade without having to make a large cash down payment.

25. Is it better to lease or buy?

It depends on a number of factors, both financial and personal. See LeaseGuide.com for more details.

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