Factory Rebates & Incentives Are Your Money!

factory incentive

Our very first caller on the national show this week was concerned that he was not going to get all the incentives that were being offered by the manufacturers.

I’ve been in the auto business or an auto journalist for the vast majority of my life. I study vehicle incentives every single month when they change, and even after all these years, I get confused.

Given that, it is no wonder people get cross-eyed when it comes to incentives. The dealers themselves have trouble keeping up. Dealers have no idea from month-to-month what the incentives will be, and it is common for them to change numerous times during any given month.

All factory incentives are designed to help the dealers sell cars.

There are certain things you need to know. All factory incentives are designed to help the dealers sell cars. It is not that the automakers are just being nice, they want the dealers to re-order, which is how auto manufacturers make their money.

First and foremost, you should remember that factory incentives are your money and the dealer wants you to have every available incentive you qualify for, that makes their job easier to help you purchase a car. All rebates come from the auto manufacturers direct to you, but the dealers administer them for your convenience. You should think of factory rebate dollars as cash, because that is what they are.

Many of the carmakers are big into sending you private offers. They have gotten good at predicting when you might be back in the market for a car, and they’ll send you mail or email offering you extra cash above and beyond what the public is offered. These are real offers but generally have a time limit on them, so read them carefully.

Another evolution of incentives is alliances and groups.

Another evolution of incentives is alliances and groups. For instance, if you are looking at a Ford pickup in the Texas market, there are extra private money offers for college students, those in the military, members of the American Quarter Horse Association, police officers, and people who are currently leasing competitive products, just to name a few.

Then we get into the quandary of rebates vs. low interest rates. No two cases are alike, and generally, you need a dealer’s help to know which is best for you. It is helpful to know what rate you can get on your own to make a fair comparison. For some, your credit union or bank rate combined with the rebates will be your best option. For others who cannot get a great rate on their own, you might be best to give up the cash rebates to get a 0% rate.

I hear from cash buyers all the time who are angry because they have to finance their vehicle to maximize cash rebates. In other words, many automakers offer an extra $1000 or so in rebates if you finance with their captive finance company (Ford Credit, Ally, Toyota Financial, etc). In these cases, it’s best to go ahead and finance to get the extra money, then either pay off the loan or refinance before the first payment is due and you will not accrue any finance charges, yet keep the additional rebate. There is nothing wrong with doing this, whatsoever.

I want to stress that factory rebates are your money.

I want to stress that factory rebates are your money. You can choose to take the rebates in cash, something we are seeing more and more people do. I have seen a good number of people get a new car, then take a large rebate in cash to pay off other debts, like high-interest credit cards.

The main thing is while in the process of buying a new vehicle, if you have questions about incentives, stop everything and understand them fully, it’s your money.

Photo Credit: northallertonman/shutterstock.com  


  1. Sam DFantis 1 year ago

    Great article. Would like to know additional details about leasing. Specifically How to position myself so I don’t have to come out of pocket with cash each new lease. Defence from finance companies from different prices on old lease vehicle pay off if you do or don’t finance new lease with them. I was told thousands more if I did not finance new lease with them

    • Amy Plemons 12 months ago

      Click the FAQ page near the top right of our website, I have a whole section on leasing, including what to do at the end of a lease, which can make a lease a lot cheaper overall and could prevent you from coming out of pocket with any cash. Using our dealers to lease from can save you a lot of time and money. I wish you the best. – Jerry Reynolds

  2. Norah Sempelsz 12 months ago

    I love your show and try never to miss it. I need your advice on which van to buy since I am going to have to load a little scooter in the backend to take with me when I need to walk a great deal like a the auto show. There are so many to choose from that I need the field narrowed down some. Looking forward to hearing from you sir. Your show is just great! I am learning so much from you.

    • Amy Plemons 12 months ago

      For me, it’s a bit of a tossup between the Odyssey and the Sienna, but most people who have scooters and wheelchair lifts favor the Odyssey, seems they are easier to convert. We have good Honda dealers all over at our website under CERTIFIED DEALERS. I hope you have a great New Year. – Jerry Reynolds

  3. David Weiman 12 months ago

    Excellent information regarding rebates with one exception. You state that you won’t accrue interest if you pay in full before the first payment is due. Not true, interest starts accruing from the day you sign the financing papers so is best to pay off the car in full as soon as you can.

    All loans start accruing interest from day one and is why payments are different for a payment due 30 days after signing the loan papers vs. first payment after 45 days, 15 days of interest are added to the loan in the second case.

    Interest on the first payment is the largest of any payment and depending on the loan amount it could be a dollar or two per day or more so the sooner you send the finance company a check, the lower the payoff will be.

    • Amy Plemons 12 months ago

      You could be correct, but my understanding and experience is that the interest is not added until the first payment due date. I have done this myself, paid off a car about 3 weeks in and the payoff was the exact same amount as the bottom line that was financed. Again, you could be correct, but that is not my understanding. – Jerry Reynolds

  4. Randy Dietz 12 months ago

    I really appreciate you and your website. Very informative. We will in the market very soon as my girlfriend, wife and lover of 30 years (all the same of course) says her 2014 Passat is “to Low” and wants to be up higher when she drives.
    If mama ain’t happy ain’t nobody happy!

  5. Abel Umogbai 12 months ago

    Thanks for everything. I listen to the show every Saturday morning. I am going to see Bob Smith Toyota this week.Does Rav4hybrid qualify for tax code179? I am an Uber driver and want to take advantage of the tax code.

    • Amy Plemons 12 months ago

      Hi Abel – we emailed you our link to Tax Code 179 last week. Did you get all the information you needed? – Jerry Reynolds

  6. Ken 11 months ago

    I am about to purchase a Heavy Duty truck. I have done my research but haven’t come up with a clear answer. My question is: Between the Cummins 6.7L diesel and the 7.3 in the F250, which engine is the better engine for light to moderate use? I am looking for a long-term truck to pay off and keep, however, I’m not sure which of the two engines you would consider best for normal city driving and 6-8 times a year pull a boat and trailer.

    • Amy Plemons 11 months ago

      I prefer the 7.3, I don’t think there has ever been a better diesel. When I was still in the car business, I had a parts truck that went over half a million miles without a single issue. If you can find one of those, I think it’s your best bet. – Jerry Reynolds

Leave a reply

Your email address will not be published. Required fields are marked *


Copyright ©2017 Car Pro. All rights reserved.                                                      Team Access          Privacy          Terms of Service          Technical Support

Log in with your credentials


Forgot your details?


Create Account