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2016 Guide: Auto Rebates & Incentives

How to Get the Very Best Deal on Your Next Purchase

Industry observers say the average value of incentives should hit a record in 2016.

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Age Fotostock

Automakers sold a record 17.47 million new automobiles in the United States in 2015, which is up 5.7 percent from a strong 2014 total, according to sales tracker Autodata. The automobile industry likely will ride that momentum with even more sales incentives in 2016, experts say.

“We just hit a record, and they’re looking for another one this year,” says Sam Fiorani of AutoForecast Solutions, which supplies forecasting and planning to the automobile industry. “I can’t imagine anybody turning off the [incentive] spigot.”

Others agree: TrueCar.com, which is an automobile pricing and information website, forecasts that the average new-vehicle sales incentive will rise to a record $3,011 per vehicle in 2016, which would be up 3.0 percent from 2015’s $2,923.

Meanwhile, federal and state rebates and tax credits amid lower demand for electric vehicles (EVs) means that you can find attractive deals for those models.

CHOICES APLENTY. In 2016, the types of sales incentives that will be offered should sound familiar: a rebate or other cash discount from the automaker or dealer; zero percent or other low-interest-rate loans; and low-payment lease deals.

Thanks to the Internet, people are researching more, experts tell us. That means that people are savvy about what incentives are available, and that, has the effect of keeping incentive competition hot.

We found that cash rebates that were available at press time topped out at $9,000, although $1,250–$2,500 was a more typical range. Although incentives typically are displayed prominently on an automaker’s “build and price” Web page, we found that you have to take what websites list with a grain of salt: Not all models qualify for each listed incentive, and some models qualify for none at all. Automakers emphasize that incentive deals are regional, so you might find a different package of incentives when you’re at a dealership than what’s listed on a website.

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What’s touted less prominently are discounts on options packages. For example, an automaker might bundle navigation, satellite radio and a rearview camera as a “technology” or “driver assist” package and charge you less than if you bought the items separately. An options package that was listed for the Ford F-150 pickup in January 2016—power folding mirrors, remote start, and heated and cooled front seats, among a list of features—added $5,495 to the price of one F-150 model. That was a $1,500 discount compared with buying the features separately, Ford says.

Chevrolet’s website in January 2016 included a $7,250 incentive on the 2016 Silverado 1500 pickup that consisted of $6,500 in cash back and a $750 discount for an options package, according to the fine print.

We don’t know whether the sales incentives that we noticed at press time will have staying power in 2016, but we’re certain that, even if those specific deals aren’t around, something similar likely will be available. “Sometimes options-package discounts last a full mo del year, sometimes not,” Ford spokesperson Mike Levine tells us. He says bundling the most commonly selected options makes more sense for consumers and dealers than it does to “piece-meal” out individual options, because dealers are eager to stock models that have the options that are sought the most by consumers.

You should keep in mind that the best loan rates and lease deals are reserved for the most creditworthy customers. (Those who are considered to be less creditworthy still can get deals, but they aren’t as good, such as a loan, say, at 4.9 percent instead of a lower interest loan.)

Automakers won’t spell out who is the most creditworthy. Their excuse: The creditworthiness of customers is determined by lenders—yes, those lenders often are affiliated with the automakers—and is based on many factors, including credit score, the amount of the down payment, length of time at your job and other underwriting factors, automakers say. (See “Vehicle Loans Grow Longer.”)

ZERO CHANCE. Oft-advertised zero percent interest-rate loans are likely to remain widely available in 2016, experts tell us. “We know zero percent financing really attracts customers,” says Stacey Doyle of TrueCar.com. “It’s been really popular. If we expect interest rates to rise, as we do this coming year, automakers will use that to continue to draw consumers.”

The slight increase in interest rates that are overseen by Federal Reserve in December 2015 helps current zero percent deals look better. The average rate for all U.S. new-vehicle loans hovered at about 3.3 percent at press time, according to Bankrate.com, which tracks consumer loans. Bankrate.com and credit-reporting agency TransUnion forecast automobile-loan rates to stay steady in 2016 because of competition among lenders.

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