How does customer incentives work?

[ScoobNewb007]

Hello everyone,

 

I am looking to purchase my first subie (2.5i legacy SE) in North Smithfield,RI and I am just curious how the rebates work. The dealer said the final price includes rebates and incentives so I figure that mean I just give up the rebates directly to the dealer inorder to get the low pricing.

 

One more advice I would like to ask everyone is financing.

I am 24, with a 700+ fico score(only thing I can think of is my work status(4month at current job)) and my APR is 7.2(not too happy) from Capital one. What i would like from everyone's input is should i go with subaru chase finance or just stick with the capital one loan and try to refinance the loan with another creditor to lower the interest in the near future.

 

Any help is greatly appreciated.

[gianspi]

A rebate is just an instant price cut. For example, if the car's invoice price is $20,000 with a rebate of $750, the car is now $19,250.

 

You should be paying nothing more than (Invoice - Rebate). The dealer makes money on holdback + dealer incentives, so don't let them tell you that "invoice" is their cost. Some people have also purchased their car for (Invoice - Rebates - $200 + goodies), goodies I mean things they asked to be thrown in, such as floor mats, auto dim mirror, etc.

[bindriftin]

7.2 is not too bad, I would check any local credit union in your area as well. If you buy the car for under invoice less rebate you are making a great deal, FWIW.

[VanillaEps]

Chase Finance can probably get you a better rate. It would't hurt to try considering you already have the approval from Cap 1.

[ScoobNewb007]

The thing about Chase Subaru, I have been reading a lot of problems with financing thru Chase.

I read they screw you over on the loan sometime if you try to pay off early and charge you for paying through online. I haven't read one good thing about Chase finance thats why I avoid going with Chase.

 

Also one more thing, do you get insurance before you purchase the car or you purchase it after you purchase the car. It is my first time buying a brand new car so I am lost with all these knick knacks when buying a vehicle.

[Legasee07]

your current insurance company picks up the insurance on that car for 30 days, with no addational fee...So your good for 30 days, but ill add the car as soon as u can..might as well call them and see how much it cost to get it insured anyhow..when i bought my 07 last month i paid 22K OTD with tax/tags (5years) and for a limited..

[ZinFreak]

The incentives aren't really traditional "rebates". They don't send you money later. Negotiate a price, then the incentive reduces that price.

 

e.g You should be able to negotiate to dealer invoice at worst. Now deduct any incentive.

 

On financing. I bought 2 new Subies this year, one at 3.9% and one at 4.9%. Yes you can negotiate the APR especially if you have decent credit. My suggestion is to shop the loan before buying at the dealer. Sometimes Credit Unions have very good rates. Dealers usually have 5-10 financing companies they work with. Stipulate an APR you want and make them do the work. 7.9% is a rip-off. You should be able to get several % below that.

 

Insurance. If you have an existing car, it will carry over to the new vehicle for 30 days. I always call my insurance co. the next business with the VIN number. They will ask you to FAX in the purchase agreement (the really LONG document you sign upteen-hundred times). If you don't own a car now, you need to arrange for insurance before the purchase. Talk to an agent.

 

Good luck, buying that first car is scary and fun!

[ScoobNewb007]

Thanks a million to all that responded to my posts.

I shopped around and some places required work criteria that would prevent me to a loan(some required 6months or more at the job).

I was surprised to get a response from Capital one with that interest myself, I would like to go through Chase but all the horror stories I read about them kept me from going that route.

[Sponge]

With 700 or more you should definately get a better rate on a new car. Here Subaru has a 2.9 APR on Legacy's not sure what the incentives are in NH but I am sure they are the same...

 

I financed mine thru Chase. They had the lowest APR available + I got another .25 off because I am an existing Chase customer (they own Chicago now because they bought the what was the biggest here). They do charge online to pay which I agree sucks because I prefer that...I set it up to auto withdraw from my checking instead.

 

Something else that wasn't mentioned is ususally you can get either the cashback/rebate of x$ or the low APR. You ususally can't get both. If you running a short term loan its usually better to get the rebate. If your doing a longer loan (60 months) the APR is better generally.

 

Go to Edmunds.com or Cars.com and you use their calculator to find out what's a better deal for you. Low APR vs. Cash Back.

 

Good luck!

[str8dwn]

With Subaru (and many others) if you take the cash, they won't give you the $750 rebate (and vice-versa). I just bought a LGT Wagon, and with my Vystar Credit Union, it is 6% - .25% for monthly auto-draft.

 

Also, if you can borrow a buddy's mtn bike and go and race in a Subaru-sponsored event or join IMBA, they give you the car at invoice (minus further haggling of course).