Archive for August, 2012
There is a wide range of financing alternatives for customers in search of a new automobile. Of course you can pay cash, but for many if not most that choice involves factors such as the annual percentage rate and a “cash back” incentive. Cash back is a popular enticement that dealerships offer in order to encourage people to buy a new vehicle. While these offers seem like a good deal, potential buyers should weigh other factors to determine if the cash-back incentive makes the most financial sense. Here are a few common options explained:
Cash-Back Program:
Cash-back incentives typically are offered by the car manufacturer as a cash-back reward for people who buy a new car. For example, a consumer goes to buy a new 2012 Dodge Avenger SE V6 from Nevada Dodge dealer, and agrees to a financing plan they will then receive a $1000 ‘cash-back’ incentive to use as part of the cars down payment. Ultimately the cash back in conjunction with whatever discounts will allow the cars price tag to come down thousands of dollars for the consumer.
APR:
A new car is a major purchase, and few people pay cash for it. Most consumers obtain a loan to buy a new car or finance the purchase through the manufacturer or a financing department. A car loan, like any loan, comes with interest rates, known as an annual percentage rate, or APR. For example a consumer could get a 2012 Dodge Caliber for an APR of 0% for up to a 60-month lease.
Low APR or Cash Back?
Some car manufacturers offer a combination of cash back and a low interest rate. Some of these offers are either/or, meaning the consumer may choose either the cash-back reward or the low interest rate, while others offer both cash back and low interest.
Calculation:
If a new Dodge Vegas consumer is faced with the decision of purchasing a new car with a cash-back incentive or a low APR, they must perform a few calculations. There are several automobile websites that offer calculators that help with this task. For example, if you’re offered $5,000 cash back or a 1.0 percent APR on a 48-month loan for purchase of $24,230—with no trade-in or cash down—you’ll save $13 per month by choosing the low financing over the cash-back offer.
Cash Purchase vs Low APR:
Another option for Las Vegas car buyers is to skip financing altogether and pay for a car in cash. Buying a car in with cash saves you money in the long run as you don’t have to pay interest, but it also takes a lot of money out of your pocket. As long as you aren’t taking money out of your emergency funds or selling other assets to purchase the car, buying a car with cash is often a good option.
Chapman Las Vegas Dodge Chrysler Jeep General Manager Don Hamrick says “Regardless of if you go with our cash back incentives or a low APR, you can be assured you’re getting a quality vehicle at a quality price. Our goal is to work with the customer to ensure their not only happy with their vehicle but also with their financing choices.”
For more information on any of the vehicle deals in this article as well as many others, come by Chapman Las Vegas Dodge Chrysler Jeep.
Strong sales have put automakers in the power seat this summer, which means consumers will likely see sparser deals than in previous years. Still, there are a few bright spots for buyers. Cheap and more widely available credit has led to favorable financing deals, and high vehicle-resale values have helped dealerships push cheap leases. Plus, there are still a few cash deals. Here is where drivers in the market for a new car can still find bargains:
Leases. “Right now, we’re seeing the most attractive leases across the board that we’ve seen in a number of years,” says Alec Gutierrez, a senior market analyst at auto-pricing publisher Kelley Blue Book. Leasing payments often factor in a vehicle’s expected resale price, and used-car values have been rising, he says. That encourages manufacturers to drop lease prices, even to the point where they beat financing deals for buyers.
Consider: A 2012 Dodge Challenger SXT For Only $249 a month on a 36 Month Lease, 10k miles/year, $999 Down, is available now at your Las Vegas Dodge dealer.
Low-rate financing. Consumers who want to hang on to a vehicle for more than a few years may find that financing is still the better deal, Caldwell says. “There are lots of 0% offers, because credit is cheap,” she says.
Consider: Chapman Dodge Chrysler Jeep has seven models for as low as $199 per month with 0% APR for 36 months. Also right now at Las Vegas Dodge is offering pre-approved financing if you make at least $350 per month.
Big vehicles. Larger SUVs and trucks typically have the biggest cash rebates, and this year is no exception, says Jesse Toprak, the vice president of market intelligence at TrueCar, an auto-pricing website. Those categories don’t typically do well when gasoline prices are high and face increased competition from new crossovers that mix size and efficiency, he says.
Bigger vehicles account for the bulk of autos with cash incentives of $1,500 or more right now, for example the Jeep Liberty has a $3,500 enticement.
Model redesigns. If price is more important to you than style, look for a car that is set to be redesigned in its next model year, Merrihew says. Incentives typically are better than on recently redesigned models because the look isn’t as fresh. There often is more room to negotiate, too. “The downside is, it will look like yesterday’s news pretty quickly,” he says.
Consider: Las Vegas Jeep has great deals on the 2012 Jeep Wrangler since the 2013 model has just hit showroom floors. The MSRP on a 2012 Jeep Wrangler is $24,575 but with a $1000 cash bonus and $843 drop in price, one can be yours for only $22,732.
