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22 Mar 09 Buy 1 new car get 1 for Free a Good Deal for Automotive Purchase?
Auto makers are experiencing one of the most difficult years to sell their cars in the history due to the slow economy. Most car manufacturers have had several consecutive months with 20% or more decrease in sales. Besides the auto bailout, in order to move cars on the inventory list, there are tons of car rebates, car incentives, cash back, special finance rate when you make car loan and special lease program for qualified car buyers. There are some car dealers have commercials or advertisement of B1G1, which means buy one get one free.
This is not a typo. Yes, car shoppers could get a new car for free if they purchase a new car. Many people might be crazy and think how those car dealers survive by having this kind of offers. However, car dealers could not only survive, the price might not be as low as people expect.
Background of Car Price
Cars are eligible for “buy 1 get 1 free” are mostly the cars for the previous model year, and some of them are totally re-designed for the current model year. In order to move them, huge amount of auto rebates are given to car buyers or auto incentives are passed to car dealers. The amount could be from $3,000 to more than $10,000, depends on the car models.
Car dealers make loans to have several hundreds of new cars sitting in their lots. In order to have money pay for their loan, they would sell the “old” cars in order to get cash on hand to pay for new cars. Besides, car dealers have limited lots for cars, so they need space to park their upcoming cars. Therefore, car price would be lower as car dealers would make less on cars on their hands.
What are the catches?
- Car shoppers will get those car rebates and incentives on top of the discounts from the car dealers when they only purchase one vehicle. However, most of the offers require that the first car is purchased at Manufacturers Suggested Retail Price (MSRP), or close to MSRP, which means the car price is inflated as car shoppers do not get those rebates and incentives. By combining rebates, incentives and all other discounts for two cars, the savings could be more or close to the value of the second car, and it is why #2 applies.
- Only certain models are eligible and car shoppers have very limited choices because not every model have enough amount of rebates and incentives to cover the difference. Different trims of the same car model could have different amount of promotions, which lead to the huge difference of car price.
- Normally, the more cars being purchased, the more cars need to be traded in or sold privately for car buyers. Selling a used car privately could be a problem as it takes time and it is not that easy to find a person who would take the car, and at the price you would be looking for. Tradein becomes the choice as most people would save time and efforts with the joy of having new cars, but car dealers usually give out lowball offers so they could make money on the old cars by selling to others. By “forcing” you to get two new cars at once and sell two old cars, they make twice money with one-time effort.
Conclusion
Nothing is free, at least in the automotive industry. No car manufacturers or car dealers would lose money to make deal, even though they do need to sell cars. For people who need two cars at once and get the promotion exactly you want, buy one get one free is definitely a good deal for you. However, for people who do not need two cars or do not like the cars offered exactly, think twice before making the deal as many people regret right after closing the deal.
Tags: Buy 1 get 1 free, Car Buying Tips
21 Oct 08 Best Time to Buy New Cars with Most Discount? (2)
You might want to ask that how does a car shopper know if there is volume bonus on certain car since mostly no website would advertise those hidden incentive. Some car dealers might disclose it to car shoppers during the negotiation when they are walk in store, sometimes it could be guessed by the quote or email sent from car dealers. The best way to know it is share and discuss with other car shoppers here because car dealers mostly would give you part of the information as they claim they are never lying. Once there are many car shoppers share the information here, the full picture might be able to be assembled and we would also try to get information for our members.
Volume bonus usually get calculated at end of a month, or more precisely, the first Monday after the end of the month. For certain date it might get extended but that’s the generally correct. Therefore, the best time to shop for a car is at end of the month. How to get a car in 30 days gives you a good example on what you need to do at certain points. Closing deals at start of the month is what car shoppers might want to avoid as even though there is room, it is hard to negotiate the price.
Another part of the discount for auto purchase is the incentive being given out directly from auto makers that is based on the car being sold, not the quantity. The form of this incentive could be to dealer, and/or to customer. Car manufacturer normally give out the max incentive when it is the end of the model year and end of the model generation. It usually happens in summer as new cars are coming out at between September and November. However, since the longer you wait, the cheaper the car price is, you could wait until even the next model year comes out. Make sure you are monitoring the car inventory as the later you purchase the car, the less choices you might have. For example, my friend got an 06 Mazda in Feburary 2007, and there are still plenty choices. However, another friend of mine bought a Honda in July 2006, while there were only 1 left after his purchase. Therefore, in order to receive the best discount from auto makers, you should wait as long as possible. In other words, you are competing with leftovers that the more inventories there are, the better discount you expect to get from manufacturer.
Discounts for car price are from both car dealers and auto makers. There is no certain date or time frame that you could get the best deal. Dealer discount and incentive from manufacturer could increase and decrease at the same time, but they are not required to be the same. In order to get the best discount for the car, you need to spend time to track inventories, dealer discounts and incentives/rebates in order to get the best car prices. The best time to get the best car deal is at the point that the max discount were given for both car dealers and car manufacturers. We are here to help to get a good deal, and we would like you to join us as well.
