New car shoppers will like what they see. Hefty rebates and discount financing offers are available on a wide range of vehicles from several major auto manufacturers. Of course, shoppers need to look closely. Some prices are increasing too. Cash rebates of $2,000 or more are common. Zero-percent financing, which was so popular and widespread last fall, is still available on a small number of vehicles. Manufacturers offering zero-percent financing include DaimlerChrysler, Kia, Hyundai, Isuzu, Saab and Suzuki. "They have to keep running faster, raising incentives to keep customers coming in," says Robert Schnorbus, chief economist at J.D. Power and Associates, a marketing information firm based in Agoura Hills, Calif. "It's a really great buying environment and just a miserable selling environment." But it's not all rosy for new-car buyers. Some auto manufacturers have started to repeatedly nudge up new-car prices. Successive $200 or $300 increases can really add up. Negotiating a good deal on price is more important than ever. Don't forget to negotiate the price
Too many people equate landing a big incentive with landing a good auto deal. They're not the same thing. A big incentive can help you land a good auto deal, but it's no guarantee. Lots of new-car buyers learned that lesson the hard way last fall. They nabbed zero-percent financing, but failed to negotiate the price of the car. "There were many, many people who paid much more than they needed to," says Robert Holb, owner and general manager of Consumers Auto Consultants. Many folks would have been better off negotiating the price of the car, snapping up a cash rebate and taking a loan from a local bank or credit union. Not sure how to choose between discount financing and a hefty cash rebate? This calculator from Bankrate.com will help you crunch the numbers. Keep in mind -- anyone who purchases a vehicle with a cash rebate gets the rebate. But not everyone qualifies for discount financing, especially those zero-percent deals. Interest-free deals are reserved for customers with excellent credit. Just how good your credit needs to be varies by automaker. Each automaker has its own financing company with its own credit qualifications. Most interest-free financing offers require financing terms of three years or less. So you'll have to shell out some pretty hefty monthly payments if you do manage to qualify. Let's say you're borrowing $20,000 to pay for your new car. With a three-year term at zero-percent interest, your family would have to shell out more than $555 a month in car payments. A five-year term at 3.9 percent with monthly payments of $367.43 may be more manageable. Compare loan rates
As tempting as a dealer's discount financing may seem, don't overlook deals from local banks and credit unions. This Bankrate.com search engine will help you compare car loan rates in your area. It's wise to have an auto loan all set to go before you set foot in a dealership. That way if a dealer wants your financing business, he's going to have to beat the best rate you've found on your own. By shopping ahead, you'll learn what kind of financing deals you qualify for. The dealer won't be able to talk you into signing on for a loan with a higher interest rate than you deserve. Whether you land an incentive or not, it's important to negotiate the price of the new car as well as the price of your trade-in. Intellichoice, Autoweb.com, Edmund's Automobile Buyers Guide, AutoSite, Autopedia, Kelley Blue Book and CarPrice.com are among the sites offering timely pricing information. Do your homework. "A consumer has to be very, very well-informed," Holb says. "Carefully, carefully research it. Be prepared to leave if you're not absolutely certain that's the vehicle you want and the best price." Be sure to visit several Web sites when researching pricing information. Everything from sticker price to customer rebate information may vary. It's wise to cover all the bases. When in doubt, contact an auto manufacturer directly. Be sure to ask about regional incentives in your area. You could save hundreds, maybe thousands more, by snapping up a regional incentive. Incentives roundup
Here's a roundup of the latest auto incentives available to customers nationwide. DaimlerChrysler is offering a $2,500 cash rebate or zero-percent financing for 36 months on the 2002 Dodge Durango, Jeep Grand Cherokee and a number of Chrysler minivans. The sport model of the Jeep Grand Cherokee and all E series minivans are excluded from this offer. The 2002 models of the Dodge Intrepid, Neon and Dakota pickup come with a $2,000 cash rebate or discount financing ranging from 1.9 percent to 3.9 percent. The program runs through July 8. Ford Motor Company is offering discount financing and a cash rebate on several 2002 models. You can land discount financing as low as 0.9 percent for 36 months plus a $1,000 rebate on the 2002 Ford Windstar, Econoline E-150, and four-door Explorer. The 2002 Ford Focus comes with financing as low as 0.9 percent for 36 months plus a $750 cash rebate. Traditional incentives, in which a customer chooses either a cash rebate or discount financing, are also available. Ford is offering a $2,500 cash rebate or discount financing as low as 0.9 percent on the 2002 Crown Victoria, Ranger and Expedition. The 2002 Taurus and Excursion come with a $2,000 cash rebate or financing as low as 0.9 percent. The program runs through July 1. Ford Thunderbird and SVT products are excluded from this offer. General Motors is offering 1.9 percent financing for 36 months, 2.9 percent financing for 48 months and 3.9 percent financing for 60 months, or cash rebates of $1,000 to $3,000 on 2002 models from Buick, Cadillac, Chevrolet, Oldsmobile and Pontiac-GMC. The program runs through July 1. All 2002 Saturn, Saab and Hummer models are excluded from the offer. The offer does not apply to 2003 GM models. GM vehicles with $3,000 cash rebates include the Buick LeSabre and Park Avenue, Cadillac Eldorado, Chevrolet Tracker and Venture, Oldsmobile Aurora and Silhouette and Pontiac Bonneville, Montana and Sunfire. Honda is offering 2.9 percent discount financing for 36 months and 4.9 percent financing for as long as 48 months on the 2002 Civic and Passport through July 1. Hyundai is offering zero-percent financing for up to 36 months on its 2002 XG350 sedan and 0.9 percent financing for up to 36 months on its 2002 Elantra through May 31. Isuzu is offering zero-percent financing for up to four years and a cash rebate of $1,500 on its 2002 Trooper. The 2002 Rodeo comes with zero-percent for up to four years plus a cash rebate of $1,000. The 2002 Axiom comes with zero-percent financing for up to four years plus a cash rebate of $750. The program runs through July 1. At Kia, zero-percent financing for up to 24 months or $2,000 cash back is available on the 2002 Spectra and Sportage. The 2002 Optima comes with zero-percent financing for up to 24 months or $1,500 cash back. Zero-percent financing is also available on the 2002 Sedona, Rio and Rio Cinco. The program runs through July 1. LandRover is offering 4.9 percent financing for as long as 60 months on its 2002 Discovery SD or SE and Range Rover HSE. The Freelander S Model comes with discount financing as low as 2.9 percent for 36 months. The program runs through July 1. Saab is offering zero-percent financing on its 2002 Saab 9-3 convertibles and five-door models and its 9-5 sedans and sportwagons through May 31. Suzuki is offering zero-percent financing for up to 36 months on its 2002 Aerio and Esteem through July 1. At Volkswagen, discount financing as low as 0.9 percent is available through May 31 on the 2002 Beetle, Passat, Golf, GTI, Cabrio, Jetta and Eurovan. The Jetta GLI, the 337 edition of the GTI and the Eurovan Camper are excluded from the offer. |