How Do New Car Rebates Work???

Dave N · 03-04-04, 08:53

I've been thinking of trading my Tacoma in for a larger truck, and am looking at a 2004 Silverado. Chevrolet has a $2500 customer cash rebate going on right now, but I'm not entirely sure how this works. I know that you can usually get an American car for right at invoice, or maybe just a little bit over, but...

How does the rebate factor in? Is this just a game, in which I can only expect to get the vehicle at invoice after the rebate is applied to the down-payment? Or should I expect to haggle the salesman down to invoice, buy the truck, and then get a $2500 check in the mail afterwards?

I'm thinking this is probably just a game to make people think they are getting a deal. The rebate can either be a check made out to the customer or be applied directly to the down-payment.

Mosca · 03-04-04, 09:42

Take the rebate from the price, and from the invoice. If you paid invoice after the rebate, then you paid $2500 over. The rebate is used as discount in ALMOST every case. In 20 years, I've maybe sent out 2 rebate checks to people.

Whether it is counted as discount or money down varies from state to state, but the difference is important. If it's discount, you don't pay sales tax on it. $210 in Dave N's pocket.

It's a real deal. But when you look at the numbers, insist that the discount, trade, and rebate be shown separately. Don't let them quote "discount and rebate" or "trade and rebate". In PA, that's actually illegal, a deceptive trade practice.

Dave N, PLEASE do not go into the dealership until you have done a lot of research. Figure out what you want, and what you are willing to pay, and if you are planning on financing, what your credit looks like and what rates you can get on your own, and how much you are willing to put down. Get a realistic value for your trade, not "what the credit union says it is worth". The best way to do that is to go to 3 or 4 dealers and offer to sell it to them. That way you'll know "actual cash value", which would be the average of those numbers.

I've been in retail car sales for almost 20 years. I know what I'm talking about here. You don't have to be a jerk to get a great deal, you have to be informed.

Tom

Dave N · 03-04-04, 10:03

Quote:

Originally posted by Mosca
Take the rebate from the price, and from the invoice. If you paid invoice after the rebate, then you paid $2500 over. The rebate is used as discount in ALMOST every case

Tom, thanks for the quick and helpful reply. That's what I was wanting to hear! I would indeed use the rebate as part of the down-payment -- I was just using the "check in the mail" to make my point more clear.

I've been doing a fair amount of research on the internet the past few days, and have the options I want narrowed down fairly well. I figure I'll let them make me an offer on my Tacoma but I doubt it will be near what I'm hoping, so I hear what you're saying there. I'll probably end up selling it on my own.

Thanks again,
Dave

GoodnClean · 03-04-04, 10:52

I do business almost exclusively with car dealerships and to add to Moscas already excellent advice, the people who walk in with a chip on their shoulder "I will NOT be screwed!" are the kind of customers that wind up getting screwed. Car salesmen are people too, they work completely on comission. Selling cars is a tough business, sometimes you do really well, sometimes you go home with $0 for a month. One year you make make $250 large, the next year 40. Its tough.

If you go in with an attitude that you're willing to work with the salesman and dealership staff to get a great and fair deal for both parties not only will you get a good deal, but it'll be a much more pleasant experience on the whole. The dealership will earn a valued customer, and you'll have an "in" when it comes time to have the car serviced and get your next one.

Now, thats not always the case everywhere. What I do is provide customer retention products and support for car dealerships, PWC and motorsports dealers, and realtors. I've had plenty of general and sales managers come to me and want me to help them retain more sales to service and repeat and referral sales. I straight up tell them that they can pay me and pay me but I can't help them if they continue to treat their customers like garbage. A hat, a nice letter, a keychain and a clean waiting room aren't going to make up for a guy who feels like a total loser when he drives off the lot. So if you've held up your end of the bargain and tried to meet in the middle and you still feel that they're not coming their half of the way, walk on out. There are plenty of dealerships that will be thrilled to conduct a painless, respectful and fair transaction with you. When I signed the papers on my Lexus the saleswoman said that we had the best and easiest transaction she'd ever had, and I got a brand new Lexus special ordered for $500 over invoice. You dont have to make an enemy to get a good deal.

There are two reasons why people groan when they hear "Car salesman" or say "I hate buying a car more than anything". They either haven't done their research and don't know what is or is not a good deal, or they have that "I will get this car and you (the dealer) will make no money!" mentality that makes for a combative buying experience. If you aren't either of those kinda people you will have NO problem!

TortoiseAWD · 03-05-04, 06:45

Dave N,

I know you said you've been researching on the 'net, so you may have already seen this . . . if not, though, you may find it useful: http://www.fool.com/car/car.htm

In particular, check out the "The Art of the Deal" section; it suggests an interesting strategy to get the best price without having to deal with high-pressure salesmen.

Tort

Dave N · 03-05-04, 06:55

GoodnClean, Thanks a lot for the thoughts on car buying. I'm with you and Tom when it comes to dealing with the dealers -- I keep my negotiations business-like and respectful. I figure that I can probably get a better deal if I develop a little bit of a rapport with the salesperson. On the other hand, if I get the "What would it take to put you in this car tonight?" line on my first visit I'll definitely walk. I recently bought a house in a small town, and am looking at the Chevy dealership there. They seem to have a decent sales philosophy from what I've experienced so far, and aren't the pushy hard-sell type. The salesman I'm dealing with approached things with an attitude of trying to find out what I want, and seeing what they had or could get, rather than the "we don't have that, but you really need to buy this instead" sell.

I'm pulling the supercharger off of my Tacoma this weekend, cleaning it up, and then I'll try to make a deal next week. If we can't reach an agreement, then I'll just strap the s/c back on the Taco and keep on a-truckin' !

Mosca · 03-05-04, 07:09

Hey, the best answer to the "Tonight" question is the truth. If you are at that stage, then tell the truth: "I've done my research, and all that is left is price. If you deal with me respectfully, and offer me a great deal, I'll buy from you tonight." If you are still looking, tell the truth: "I'm still finding out what I want. One of the things I'm looking for is a dealership that will treat me with respect, one that will help me decide AND offer me a fair price, and that won't make it an ordeal. If you can offer me that better than any other, I will buy from you eventually, but I will not commit to anything on this visit." Hey, he hit you between the eyes with a direct question; hit him back in the same place with a direct answer. You will earn a lot of respect for that, most people answer by lying about a commitment then backing out at the end of negotiations. IOW, they set THEMSELVES up for an ordeal sometimes.

You will have a better chance at a relaxing SHOPPING experience (not buying) in the mornings, mid week. That's when the salesperson has lots of time for consultation. There is nothing worse for a salesperson than sitting down on a Saturday afternoon with a customer who wants to look at a Silverado, an Avalanche, and a Colorado, and wants to drive each one and then factory order next week if he can get it at invoice , when the used car lot is overflowing with customers waving money. Sometimes your competition isn't the salesperson, it's the other customers competing with you for his time. Be smart and eliminate that competition. Shop on weekdays, buy on weekends.

Tom

GoodnClean · 03-05-04, 12:32

100% agree. Whenever I call on a dealership I walways go on a weekday morning so we can have time to discuss everything we need to discuss. Thats why I have so much time for detailing, by noon I'm done working for the day because none of my clients have time to see me after that.

My fiance is looking to buy a Mazda 3 5 door and we were looking around tonight. Now, she's nowhere near buying, she's going to need a cosigner, has no insurance set up or anything, she just wanted to see different colors etc. We'd been to one dealership with a very quiet laid back salesman, and we walked into another and got paired up with a real pro. He pulled the whole "What will it take to put you in this car tonight" bit. Now, she's never bought a car, any car, and has only experienced buying a NEW car once, with me (which was not at all like a real carbuying experience as it was all done over the Internet basically) so she was totally out of her element. Of course I've learned she needs to learn her own lessons (she's like that lol) so I just sat there and played dumb. He had charts of numbers, he was hiding profit in payments, "how much money should I make on this car?" etc etc, trying to convince her to run her credit to get her approved and she could drive off tonight (which was rediculous as she has no credit, no verifiable income, and no insurance and she knows it), pushing the phone at her to have her dial her cosigner, it was terrible. Finally I couldn't watch anymore and told the guy "You know, we're really not ready for this and theres no way a deal is going to happen until we do more research and have time to make an informed decision"

He wasn't happy, but he gave us the numbers and we left. Sure enough we get home and I run some numbers and he's hiding $2000 of profit somewhere between the figure he's quoted and the financing. Always be leery if they're quoting you payments without disclosing the agreed upon price, $1000 of hidden profit profit only increases the payment about $18, most people wouldn't notice.

The moral of the story is, do your research and be informed before you do the deal. Mosca's right, be straight with the salesman upfront and let them know if you're just looking. Tell them that if he gives you some space now then you may be able to make a deal later, but pressure now isn't going to make him a sale its going to loose him one.

Problem is like I said before most carbuyers are very unethical themselves and blame it on the salesmen. Now, this guy was being dirty with this deal, he knew he had her outclassed and right where he wanted her, but she should have laid it out for him right outfront and he would have left her alone. Carbuyers think nothing of using one salesman for all the factfinding, then walking into the same dealership and buying it from the first guy they see. The salesman that worked for them for days did all of that for free, thats not fair he deserved that sale. The process is a two way street. Thats why I'm in business, because buyers even if they got an awesome deal and had a fantastic experience think nothing of loyalty.

rightlane · 03-05-04, 01:31

Carquotes.com for invoice pricing and dont forget the app 3% hold back.

good luck.

medic · 03-05-04, 01:59

when you're ready to buy, try internet sales from the dealers. you send them a message and within 48 hours usually you'll get a price and availiblity for the vehicle you want. you can use these deals against each other so you may be able to get the price you want from the dealer you want. I wouldn't recomend taking too long though or too much back and forth becasue even the dealer can walk away.

also, check out the TMV feature on edmunds. it shows what people are actually paying for the car with rebates, etc. you can also find dealer holdbacks which you can work into the deal.

LouisanaJeeper · 03-05-04, 03:49

Well, you sort of have to trick the seller if you have a trade in. When you first go in negotiate the price on the new car till it is reasonable (DO NOT MENTION TRADE IN). Now once, you have negoitated your price, say btw, I have a trade in and if you give me 80% kbb dealer value, we have a deal.

If you tell them about the used car, they will try and give you less for your trade in and more "discounts" on the new car or try to give you less discounts and more for your trade. Anyway, -I- think it is better this way.

You should be able to get the car for: invoice-$500-rebates + ttl- trade in

newagain · 03-05-04, 06:17

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