Which is the Better Deal for New Car Buyers?

In a way, it's a case of too much of a good thing. Dealers and manufacturers offer all sorts of incentives for buying a new car, but the combinations of those incentives are difficult to figure out. Low APR and manufacturer's rebate cash are a classic example. Many dealers of new cars will offer you the ability to choose one of these incentives and they both sound great. Both are incentives meant to move new cars that are not selling as well as the manufacturer would like. Manufacturer's rebate cash allows you to get a lower overall price on new cars, since the manufacturer "pays" for some of the purchase, while a low APR (annual percentage rate) means that the customer pays less in the annual cost of credit. Some new cars can be purchased for a low 0.0% APR currently.

Researching APR and Rebates on New Cars

To decide which is the best for you, begin to decide before you leave the house. Consult web sites such as Autobytel.com, Autoweb.com, CarSmart.com, InvoiceDealers.com, AutoBargains, Autos.yahoo.com, Edmunds.com and Cars.com, which can tell you what the current incentives and rebates for new cars are. Since most incentives are factory-sponsored, you can research the low APR and rebate options in the comfort of your own home and even use a calculator to evaluate which would save you the best money overall. Through careful online research you may find that some new cars are eligible for both a rebate and a great APR, which is obviously the best of both possible worlds. When you go to a dealer, you will know exactly what you qualify for, which is handy since deciding between the two on the spot is difficult. Best of all, you may point out that you are eligible for incentives for new cars that the dealer does not know about or does not publicize. Just be certain that you are looking at rebates and incentives that are still current - most of the deals are very time-limited, so make a quick note of which new cars have incentives until what date.

Look at Your Credit and Car Buying History for Clues

If you have to choose between the two, get your financing first, taking advantage of a low APR and then see if you qualify for any rebate. If you are buying a new car for the first time or if you have a bad credit history, you may be better off taking the cash rebate. This is because financing is based on credit and if yours is not great, you may get a worse rate than what is advertised. Instead of finding out that you do not qualify for the low rate and have missed the chance of getting the rebate, you can just take the cash. If you know that you have a bad credit history, you may want to look at new cars that offer generous rebates, maximizing your savings. If you are buying your first car, you may not have a trade-in or much cash for down payment and the rebate cash can be more helpful to you that way.