“How to navigate the incentives maze”

George Yacik.“How to navigate the incentives maze.” Automotive News. 13 Oct. 2014.

“From cash rebates to discount financing to lease subvention deals, complex automaker incentive programs keep dealership F&I departments constantly on their toes to find car buyers the best deals…

“Complex manufacturer incentives are incredibly common,” says Rob Drury, executive director of the Association of Christian Financial Advisors in San Antonio, a nonprofit network of financial professionals. “Many incentives are subject to eligibility, and it is common for these to be incompatible with others.

“For example, factory rebates are usually not available to be used alongside manufacturer-sponsored special financing, and some eligibility-driven incentives cannot be used in combination with others. If one isn’t careful, this can be very confusing”…

…General Motors typically has 20 to 25 programs in a given month; August’s offerings totaled 66 pages…

Shuman, who says lenders’ lease programs at his store can change “three, four, even fives times a month,” gives kudos to Chrysler Capital for a computer system called the incentive configurator…

“A lot of consumers think incentive programs are too complicated, too limiting and, in the worst cases, just a come-on to get them interested and into the dealership.” says Jack Nerad, executive market analyst for Kelley Blue Book. “At that point they discover the vehicle they really want doesn’t carry the incentive…”  read in full


ConsumerAuto.org says:

Manufacturers have replaced the historic dealer discount (25%) from sticker price with Incentives and rebates.  Today dealers pay almost full retail sticker price (about 97%) to the manufacturer before the vehicle is shipped.  By manipulating prices to consumers through incentives and rebates, manufacturers have been able to reduce the discount to consumers dramatically.  They have caused great stress for consumers because prices are constantly changing.  Consumers get one price on Monday, but may get another on Thursday because of a manufacturer change.  From the consumer’s viewpoint this is a very deceptive business practice by the manufacturer.  Unfortunately, consumers think the dealers are doing it.    

That’s why we believe the law should require manufacturers to provide the same bargaining opportunity, on the same vehicle, at every dealership of that brand, for all consumers throughout the state. Consumers have no way of knowing which dealers are getting incentives.

It’s not just warranty and repair policies that are very complex. The rebate and incentive offers manufacturers  trumpet to get consumers into the showroom are so confusing that carbuyers often don’t understand what offers are available on what cars – and what price they ought to pay on any given day.  Even Automotive News is writing about the confusion.