Manufacturers Incentives, Rebates & Marketing Pools
Car manufacturers started rebates to motivate sellers and move old inventory off the dealer lots. Now rebates have become so common many buyers expect the discounts and time their purchase accordingly. Fortunately you can find all the available incentives & rebates in your market online.
The incentives offered to buyers typically include cash back, lower interest rates or special options packages. You can find most incentives & rebates online for free. You can also use a car buying service to find the discounts and save you money. There is a difference between advertised Consumer Rebates and secret incentives paid directly to dealers. Since both affect the dealer's ability to discount the price, you want to know about all the discounts available. That's why you need Affiliate.
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Manufacturers also offer incentive directly to dealers. Most buyers realize the dealer will pass the cash or rebates to the buyer if the buyer asks. Since this rebate information is not advertized you should always check online for each model you are considering while you are shopping.
Dealer's know which vehicles the manufacturer needs to move. Any models sitting on their lots over 60 days are probably on all their fellow dealer's lots. It is a sure bet the factory will offer something within 30 days.
Why this is important to you the buyer; If you want a particular car and notice the Manufacture Date is 60 to 90 days ago, check for a factory do dealer incentive. If there currently isn't one, and inventories for that particular model are high, wait a couple weeks and there will be! Your patience could save you a couple thousand dollars!
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Dealer Volume Bonuses
In addition to the disclosed rebates, Manufacturers also pay volume bonuses to the owners. These payments are not tied to any particular car but instead to overall unit volume or a particular class of vehicle such as trucks. The manufacturers and dealers never disclose these bonuses to the sales teams. It also keeps them under the RADAR of "true pricing" lawsuits. Buyers will never receive credit for these bonuses but they do affect pricing and allow dealers to sell "below invoice" and still make a profit. The dealers love it because it's a commission they don't have to split with their salesmen!
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Since Dealerships are independently owed franchises, the media market for a metropolitan area may include several dealerships. Since television advertising would be too expensive for any one dealer to afford, the manufacturers have created cooperatives with all the dealerships contributing for combined advertising campaigns.
With these group buying pools, advertising can be subdivided into as many as four categories: National, Regional, Media Market and Dealer Specific. A manufacturer may advertise new models or a sales promotion on a national level. Dealers benefit from national ads but do not have to contribute to the media costs.
Rebates and Incentives are usually targeted by region and the dealers may contribute to the cost of the ads.
Media market buys cover all the dealerships in a large metropolitan are. You can always pick out ads mentioning: "Chicago Area Ford Dealers" or "Miami-Dade Toyota Dealers". Most of these ads are paid for by all the dealers but not always. Some dealers opt out by re-categorizing costs and spending the required money on special sales commissions and other promotions instead. With the accounting shift they also replace the regular commission with the "special commission" and net a higher profit. This is yet another way dealers can "sell below invoice" and still make a healthy profit.
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