It has often been said that the best way to get a deal is to do the opposite of what the crowd is doing. Dealer showrooms are quiet in January, after the end of 2018 rush and while the weather is less than ideal. It’s a great time to let car dealers earn your business.
This January, automakers are helping with some exceptional deals that can save you thousands of dollars. Not only are there generous cash back offers, but some manufacturers also continue to offer zero percent financing deals. QuoteFin.com has researched the best card deals and will show you the best loan options for you. Even if you can’t get a zero percent deal, any interest significantly under market interest rates can save you money.
Some of the best cash back deals this month include an $8,000 rebate on the 2018 Cadillac Escalade, as much as $5,000 cash back on the 2018 Prius Prime, and up to a $7,750 discount on the 2018 Volvo V90. There’s even up to $5,000 cash back on the redesigned-for-2019 Ram 1500 in some parts of the country.
Zero percent deals are getting a bit harder to find as market interest rates climb, though there are some great ones if you know where to look. To get a free online quote you can check out sites like QuoteFin.com. In some regions, Lexus is offering a zero percent deal on the 2018 Lexus RX L 350, plus up to $5,500 cash back. There’s a six-year, zero percent deal available on the 2019 Buick Enclave, as well as several other Buicks.
Some deals are limited to specific regions, trim levels, or a particular percentage of dealer stock. Save yourself some time before you head to the dealership by checking with an online sales consultant or using our Best Price Program to ensure that you’re considering the best deal that you can get.
Zero Percent Car Deals
Zero percent car deals are becoming less common, though they’re still available on slower selling models and those near the end of their product cycles. Surprisingly, there are a few zero percent offers available on popular models like the 2019 Subaru Outback and new models such as the 2019 Hyundai Ioniq Electric. Additionally, some automakers continue to offer massive cash back deals on some models.
Getting a great deal on a new car takes research. By learning how to identify a good deal, knowing where to find the best deals, and understanding how to take advantage of the best offers, you’ll be prepared to save thousands off the price of your new vehicle and its financing.
Some of the best deals this month are on models that have replacements on the way or are facing renewed competition, such as the 2019 Kia Soul and 2018 Cadillac Escalade. However, a surprising number are newer models, including the redesigned 2019 Ram 1500, the 2018 Volvo V90, and the 3-row 2018 Lexus RX L. The $7,750 cash back deal on the Volvo has spanned several months.
In honor of the new year, GMC is offering 19 percent off the MSRP of the 2019 GMC Acadia. Depending on the model you choose, that discount can amount to more than $8,000.
As fuel prices continue to decline, vehicles with exotic hybrid, plug-in hybrid, or electric powertrains can’t command the premium prices they can when fuel prices are high. That’s one of the reasons you’ll find great deals this January on cars such as the 2018 Toyota Prius Prime and 2019 Hyundai Ioniq.
Some of the large cash back deals require buyers to finance their vehicles through the manufacturers’ associated finance companies, but most will allow you to refinance your car loan a few months down the road with less expensive lenders, such as community banks or credit unions.
What Is a Car Deal?
Automakers don’t hit a home run every time they get up to bat. Some cars and trucks don’t meet sales expectations, and all vehicles eventually reach the end of their product cycles. Manufacturers offer incentives to increase the pace of sales on these models and get them off dealer lots. Car deals like these provide substantial discounts for buyers – no haggling required.
There are three main types of buying incentives: financing deals, cash back offers, and lease incentives. Once you find a deal you like, find a quote on QuoteFin.com. They will help you not only with financing but also connecting you with the dealer you need for the model you choose.
Despite the enticing name, getting a cash back deal doesn’t mean that you’re going to get a pile of cash as you leave the dealership. A cash back offer is simply a discount on the price of the car. They go by several names, including cash rebates, bonus cash, cash back incentives, and cash allowances. No matter what name the manufacturer uses, these incentives all work about the same. Taking advantage of the $4,500 cash back deal on the 2019 Chevrolet Equinox LT, for example, instantly lowers its price from $27,200 to $22,700. Of course you should try to negotiate an even lower price on the vehicle, even if you’re taking advantage of a manufacturer’s incentive.
A significant car-buying cost that many consumers don’t consider is the price of their financing. Interest charges can add thousands of dollars to the overall cost of a car, so getting a discounted interest rate is an excellent way to save some money. A financing deal is like finding a bank with a huge “sale” banner in the front window, offering an interest rate that is well below the market rate. The lower interest rate allows you to lower your monthly payments, shorten the length of your loan, or get a higher-priced car without busting your budget.
We’ll use one of this month’s financing deals to show just how much money you can save. The 2019 Buick Enclave is available with a six-year, zero percent deal. If you buy a midrange Enclave Essence model with a price of $42,000 and take advantage of the financing deal, you’ll only pay that price, broken up into equal monthly payments of $583 over the six-year term of the loan. On the other hand, if you had to pay interest at the current average rate of 5.02 percent for a six-year loan, you would pay a considerable amount in interest. Using the U.S. News Best Cars interest rate calculator, we see that the monthly payments, including interest, would be $677. Instead of $42,000, the total cost of your new Enclave would be $48,744.
The financing deal would save you $6,744 over the six-year loan term.
The best financing deals are zero percent offers, because you don’t pay any interest at all. Still, any interest rate that is well below the market rate will save you money.
While salespeople might indicate otherwise, shoppers who are getting cash back or financing deals can still attempt to negotiate a lower sale price. Most of the best car deals are reserved for shoppers with top-notch credit scores. By checking your credit well in advance of car shopping, you can work to correct any errors on the report and make timely payments to improve your score. Even a few extra points on your score can pay big dividends if they allow you to qualify for a special car deal.
Of course, most car deals come with a lot of fine print and restrictions. Many offers are limited to residents of specific regions. Be sure to use our Best Price Program, check with your local dealer, or chat with an online sales representative to ensure that you qualify for any offer you are pursuing. Pay particular attention to ensure that a deal won’t expire before you purchase the car. Even missing it by one day can disqualify you from getting the discount.
Be sure you check with multiple dealers before you settle on the price. Different dealers can pay varying invoice prices for the cars they buy from automakers, and those differences may be reflected in the price that you can negotiate. If you can travel a bit or communicate online with several dealers, you might be able to save a considerable amount of money. Think about buying your new ride in a location where it might not be popular. For example, plug-in hybrids might cost less at rural dealerships, while full-size pickup trucks may be more affordable at urban outlets.
How Do You Know If It Is a Good Deal?
Just because special offers are advertised does not necessarily mean they’re a good deal for you. You’ll have to look beyond the monthly payment to the rest of the deal’s terms to figure out whether it’s a good deal or not. It’s pretty easy for a seller to manipulate the monthly payment to look like a good deal when, in fact, you’re overpaying.
The way to evaluate new car deals is by looking at the total cost of the vehicle, including the price of financing. Spending a few minutes to crunch the numbers can save you big bucks and prevent you from making a mistake that will haunt your finances for years. You should always do the math yourself, rather than relying on a salesperson who’s trained to manipulate the numbers.
It’s critical that you consider buying a new car as three separate transactions: the price of the vehicle, the value of your trade-in, and the cost and method of financing. Packaging all three together breeds confusion, and confusion can be costly if it leads you to a bad deal.
When you are faced with a decision between multiple financing options or a cash back and low interest financing deal, some simple math will show you the total cost of each option. To illustrate, we’ll use a couple of this month’s new car deals.
Cadillac is offering a $6,000 cash back deal on the Escalade luxury large SUV if you bring your own financing, or you can opt for a six-year zero percent financing deal. The midrange Luxury trim level of the 2018 Cadillac Escalade has an MSRP of $80,295. For simplicity, we’ll assume you’re not making a down payment or trading in another vehicle.
With the zero percent deal, you simply divide the $80,295 price by 72 months to see that each monthly payment would be $1,115. Because you’re not paying interest, the total cost of the loan is $80,295.
If you take advantage of the $6,000 cash back, the price of the SUV drops to $74,295. However, you’ll have to finance that amount at the market interest rate. The current average for a six-year loan is 5.02 percent, and we’ll assume that’s the rate you are able to get. Of course, it’s a good idea to shop at multiple lenders, including banks, credit unions, and online sources such as QuoteFin.com to get the best rate you can.
Using an auto loan calculator, we find that the monthly payment, with interest, comes out to $1,197. By taking the cash back instead of the zero percent deal, your monthly payments would be $82 higher per month. Over the six years of the loan, you’d pay an extra $5,904 in interest.
You can never assume that one type of deal is superior to another without running the numbers and considering your personal financial circumstances. If you were making a substantial down payment, got a great interest rate, or were trading in a high-value vehicle, the numbers in this example might have favored the cash back offer.
Whatever you do, it is critical that you resist the urge to get a lower payment by extending your loan out a year or two. Going for a loan that’s more than five years dramatically increases your financial exposure and will usually involve a higher interest rate. You want to avoid a situation where your car is so old that it requires costly repairs, yet you’re still making monthly payments.
Completing the Deal
By the time you’re ready to sign the final papers, you’ve probably spent a ton of time negotiating with the dealership. While you may just want to sign the papers and drive away in your new ride, you should instead slow down and read each document carefully. Ensure that the numbers match the agreement you negotiated, and that no costly add-ons or outrageous dealer fees have been slipped into the deal.
Pay particular attention to the price, the length of the loan, and the interest rate. Never sign papers that don’t have complete details, aren’t fully filled out, or contain errors – even if the finance officer promises to correct them later. If you are pressured to sign them anyway, consider it a huge red flag and walk away from the deal. Never drive away from the dealership until you have the final loan documents signed. You might fall prey to an unscrupulous dealer who will make you return to sign final papers at a much higher price.
The best car deals include purchase deals for Toyota, Nissan, Ford, Honda, Chevrolet, Hyundai, Kia, Dodge, Ram, Jeep, Mazda, Buick, GMC, Subaru, Volkswagen, Acura, Cadillac, Porsche, Mercedes-Benz, Audi, BMW, and Lexus vehicles. QuoteFin.com expert researchers and journalists also search the market for this month’s best lease deals and best used car deals. They’ve done the research to help you find a great ride at a great price.