How To Find The Best Auto Incentive

How To Find The Best Auto Incentive

 

What’s a better incentive, zero-interest financing or cash back?

There’s no clear-cut answer, and honestly, a lot may actually depend on your taste in vehicle. If you analyze the incentives typically offered on both sides, most domestic makers offer cash back while foreign and luxury brands offer low financing and lease deals.

Let’s throw another wrench into the mix: Even this isn’t always clear-cut for most car shoppers because another growing shopping option can be found through car lease transfer, which offers additional incentives for people looking for a car.

The fine folks over at Edmunds.com provided some excellent analysis for Forbes’ Hannah Elliott and her story on how to find the best auto incentive. Here’s a breakdown of what they found:

New Car Incentives

Most new car incentives based on cash back were offering roughly $4,000 to the purchaser. Edmunds pointed out a few cars that made their list of best incentives for cash back. This includes the Chevy Cobalt (MSRP $31,575), Nissan Titan (MSRP $26,540), and Ford Focus ($17,170). After factoring in the cash-back incentive and interest rate, you’re still paying between $400 and $500 per month.

What’s important to note here, and not discussed in the Forbes article, is the amount of negative equity you may be carrying over from a previous car payment. Many car shoppers get upset at the bottom line price and payment when car shopping, forgetting that the finance manager must factor in the balance of negative equity from a previous finance or lease. And since some people have negative equity as high as $10,000, your new car payment even after the incentive ca still be as high as $600 or $700 per month.

That’s not a deal in our opinion.

Through lease transfer you can completely wash away the negative equity on your car lease since the person picking up your lease takes over the payment (while you walk away). What’s more, there’s no down payment when taking over a lease through transfer, so if you use a secondary market as a way to shop for a car lease you can find a low payment by getting the best of both worlds – low financing and no down payment. Check out similar vehicles and the down payment/monthly payment fees from LeaseTader.com:

 

--Here’s a Chevy Cobalt with $0 down payment and an advertised list price of $185 per month.

-- Here’s a Nissan Titan with $0 down payment and an advertised list price of $423 per month.

--Here’s a Ford Focus with $0 down payment and an advertised list price of $191 per month.

While it’s true there are amazing deals at the retail level, make sure you know the full picture when figuring how to find the best auto incentive and your payment picture.