New Cars for Cheap
If you are currently looking for an affordable automobile, right now is a great time for automotive consumers. Cars for cheap prices seem to be everywhere — especially if you want a brand new car. In fact, new cars have never been cheaper.
Why?
You may have noticed that in the current economy new car sales have decreased dramatically during the last three years. Car makers have had to borrow money from the government to stay afloat. Whole brands have disappeared, or will soon disappear. Car dealerships have been shut down and many have gone bankrupt. Car often sit on dealer’s lots for months before they sell. The U.S. government had to back a “cash for clunkers” program to try and stimulate sales.
Although the situation seems to be getting better now, car manufacturers are currently offering some of the best new-car incentives they’ve ever offered in their history. New cars are cheap compared to a couple of years ago.
What makes new cars so cheap now?
First, there are factory-to-customer rebates — large rebates. Rebates are like cash that you can apply as a down payment to your new car, which can be great if you are already short on down payment money. Rebates reduce the amount you have to pay, although it’s different from a price discount. A large rebate can actually allow you to buy a car for less than dealer invoice price.
Then there are dealer price discounts — dealers reduce the selling price of their cars and reduce their profit. This money comes from the dealer’s pockets, not the car manufacturer. Again, a factory rebate combined with a dealer discount can easily allow you buy a car at below dealer cost. Although factory rebates are fixed and available to everyone (for a limited time during promotions), dealer discounts might have to be negotiated.
Next, there is factory-to-dealer cash, which is “secret” money given to dealers (for a limited time during promotions) by the manufacturer. Although dealers can use the money for many different purposes (tent sale events, promotional advertising, TV spots), most of it typically ends up a dealer price discount, except the money comes from the factory’s pockets, not the dealer’s.
Next are low-interest loans — or zero (0% APR) loans. Normal new-car interest rates are currently around 6.5% APR but car manufacturers can make loans for less during limited-time promotions. They can even offer no-interest loans, which means the car buyer pays absolutely no finance charges or interest for the life of his loan. This is a great way to save money on a new car, but the deal typically requires you to select either the rebate (if offered) or the low-interest loan, but not both.
Since most car makers are now offering big incentives to buyers in the form of rebates, price discounts, dealer cash, and low-interest loans, it is not difficult to find cheap cars without even looking too hard — and without ugly negotiations.
You can get free price quotes on any new car from Edmunds.com.
The quotes will automatically include any cash-back rebates or discounts that are currently available.
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