Buy one car, get one free — now that’s an incentive to get your attention! It’s not likely that many auto dealerships will be following the lead of University Dodge, a Davie, Fla., dealership that’s attracted a lot of attention with an offer of a free Dodge Ram two-door truck with the purchase of a 2008 Dodge Ram Quad Cab.

Still, there are plenty of good year-end incentives on vehicles if you want to start the new year off in new wheels. Most of the current incentives are good through Jan. 5, 2009. Low-APR financing is still available on many models, and others are offering thousands in cash-back rebates. Some are even offering a combination of both.

“It’s a great time to buy,” says Jesse Toprak, executive director of industry analysis for automotive research firm “We usually say the optimal time to buy is September or October. That shifted later in the year this year, and sales in November were worse than expected. That means there will be lots of end-of-year pushes from manufacturers.”

The reasons for the year-end sell-a-thon include dealership sales incentives ranging from cash to gift cards to enhanced vehicle allocations, says Charlie Vogelheim, vice president of automotive development at J.D. Power and Associates. Plus, many states assess an inventory tax for products that carry over from one year to another.

Due diligence scores rewards

Incentives can vary from dealer to dealer. High-performance dealerships often get extra cash or special financing to offer customers, so it pays to shop around and get quotes from two or three dealerships. Remember, negotiate your best price first, then figure incentives off that price, not the sticker price.

Customize your incentives

One attractive aspect of vehicle incentives is the ability to stitch several of them together for extra cash. Many manufacturers have special programs for first-time buyers, new college graduates, repeat buyers, and members of the military. If you’re thinking about switching makes, ask about conquest incentives. Those are designed to entice buyers to jump ship.

Finding the deal tailor-made for you

So with all the deals available, which one is best for you? As with most financial matters, the answer isn’t cut and dried. The math can get tricky, given the number of options available. Web sites such as offer calculators to help consumers figure out which deal is best for them, given their specific details, such as amount of down payment and their trade-in.

A rough guideline is that if you’re the kind of person who keeps a car until the wheels fall off, it makes sense to look at the zero-percent or low interest rate financing, assuming you’ll qualify for it. If you tend to trade in a car within three years of purchase, it might be better to take the cash rebate and arrange your own financing, Toprak says.

One negative about incentives is that vehicles that have lots of cash taken off the front end tend to be worth less money when it’s time to trade in.

“If you look up values in Kelley Blue Book, you’ll see cars with heavy rebates have lower residual values,” says Mark Bilek, Internet director for the Chicago Auto Trade Association.

“If you keep a car for, say, four or five years, sometimes that resale value is worth more than the cash upfront. There really is some tricky math you have to do as a consumer to make sure you’re doing the right thing. A Chevy Venture [had] a resale value of 40 percent after four years; a Honda Odyssey’s resale value is 52 percent. On a $30,000 minivan, that difference is your $3,000 cash back right there.”

Savvy buyers look beyond the rewards

While a rebate or special financing may get you into a dealership to look at a car, consumer automotive experts stress that they should be way down on the list of reasons to buy. Don’t buy a car that doesn’t meet your needs just because of incentives, and research your financing options on your own. Also, if you’re trading in a car that you’re still paying on, the balance likely will be rolled into the loan for your new car. Depending on how many payments you’ve made, the car could be worth less on trade-in than the balance on the loan. If that’s the case, and the car still meets your needs, you might want to sit tight for awhile.

Finally, remember this: Rebates and special financing offers aren’t going to be gone when the calendar turns over to 2009. As much as manufacturers would like you to think you’ll never see deals like this again, incentives are here to stay, says Bilek. Don’t get sucked into thinking that you have to buy now or lose the chance for a great deal.

“Every couple months, manufacturers say they’re going to pull back on incentives, and then they announce a new program,” Bilek says. “As long as the car is there, the rebate will be on it. Buy the car you want, the car that meets your needs and the car you can afford.”

Pat Curry is a freelance writer based in Georgia.


Plus:What the auto makers are offering


End of model year car-buying tips


Zero percent vs. dealer rebate calculator

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