Auto Incentives

How To Find The Best Auto Incentive

John Sternal, LeaseTrader.com — Wed, 05 May 2010 20:42:43 GMT

How To Find The Best Auto Incentive

What’s a better incentive, zero-interest financing or cash back?

There’s no clear-cut answer, and honestly, a lot may actually depend on your taste in vehicle. If you analyze the incentives typically offered on both sides, most domestic makers offer cash back while foreign and luxury brands offer low financing and lease deals.

Let’s throw another wrench into the mix: Even this isn’t always clear-cut for most car shoppers because another growing shopping option can be found through car lease transfer, which offers additional incentives for people looking for a car.

The fine folks over at Edmunds.com provided some excellent analysis for Forbes’ Hannah Elliott and her story on how to find the best auto incentive. Here’s a breakdown of what they found:

New Car Incentives

Most new car incentives based on cash back were offering roughly $4,000 to the purchaser. Edmunds pointed out a few cars that made their list of best incentives for cash back. This includes the Chevy Cobalt (MSRP $31,575), Nissan Titan (MSRP $26,540), and Ford Focus ($17,170). After factoring in the cash-back incentive and interest rate, you’re still paying between $400 and $500 per month.

What’s important to note here, and not discussed in the Forbes article, is the amount of negative equity you may be carrying over from a previous car payment. Many car shoppers get upset at the bottom line price and payment when car shopping, forgetting that the finance manager must factor in the balance of negative equity from a previous finance or lease. And since some people have negative equity as high as $10,000, your new car payment even after the incentive ca still be as high as $600 or $700 per month.

That’s not a deal in our opinion.

Through lease transfer you can completely wash away the negative equity on your car lease since the person picking up your lease takes over the payment (while you walk away). What’s more, there’s no down payment when taking over a lease through transfer, so if you use a secondary market as a way to shop for a car lease you can find a low payment by getting the best of both worlds – low financing and no down payment. Check out similar vehicles and the down payment/monthly payment fees from LeaseTader.com:

--Here’s a Chevy Cobalt with $0 down payment and an advertised list price of $185 per month.

-- Here’s a Nissan Titan with $0 down payment and an advertised list price of $423 per month.

--Here’s a Ford Focus with $0 down payment and an advertised list price of $191 per month.

While it’s true there are amazing deals at the retail level, make sure you know the full picture when figuring how to find the best auto incentive and your payment picture.

Toyota quality issues force incentives that could last months

David Walker, LeaseTrader.com — Fri, 16 Apr 2010 14:30:38 GMT

Toyota quality issues force incentives that could last months

LOS ANGELES (Bloomberg) -- Toyota Motor Corp. may maintain elevated U.S. discounts for months to draw buyers as the automaker battles to recover its reputation for quality, according to industry analysts who track pricing and incentives.

The company began offering no-interest loans and discount leases on most Toyota-brand models in early March, extending them this month. The incentives were worth $2,568 per vehicle last month, up $1,003 from a year earlier, according to Edmunds.com. Toyota hasn't said if the program will continue through May.

“With what we can gather today, they're going to have to continue this level of spending until 2011 models start to come in a meaningful way,” said Jesse Toprak, vice president of industry trends at forecaster TrueCar.com. “That could mean until about August.”

The discounts fueled a 41 percent U.S. sales gain for Toyota last month, after recalls of about 8 million autos globally for unintended acceleration problems triggered declines earlier in the year. U.S. regulators said April 5 that Toyota “knowingly hid a dangerous defect” related to sticky gas pedals, and Consumer Reports on Tuesday called the Lexus GX 460 SUV a “safety risk” because of its handling.

‘Lexus mess'

Earlier this month, Toyota looked to be putting “bad news from January and February behind it,” said James Bell, executive market analyst for Kelley Blue Book, a vehicle pricing and data company. “My sense is this Lexus mess is going to keep the incentives around for at least another month, if not longer, and you might also see them on Lexus.”

Toyota can pare production quickly, so it isn't likely to experience the long-term incentive problems of Ford Motor Co. and General Motors earlier in the decade, he said.

“Toyota is better tuned to the market, and doesn't have the same labor issues that kept GM and Ford locked into incentives to maintain volume,” Bell said.

Incentives are “the quickest way for us to restore customer confidence and trust,” Takahiko Ijichi, a Toyota senior managing director, told investors in an April 7 conference call.

There's no decision yet on whether current offers will be extended beyond May 3, said Celeste Migliore, a spokeswoman for Toyota Motor Sales U.S.A. Inc. While the focus on low-cost financing rather than cash rebates will continue, Toyota may shift to setting incentives by region instead of one national program, she said.

Extended use of discounts would erode the residual value of Toyota vehicles and hurt used-car sales, so the company will try to “climb down” from current levels as quickly as possible, said Jessica Caldwell, director of industry analysis at Edmunds.com.

“They could carry this out until things look better from a PR perspective,” she said. Toyota may retain incentives at about the current level at least through May, Caldwell said.

Toyota now offers Free maintenance and extends 0% loans

David Walker, LeaseTrader.com — Wed, 07 Apr 2010 14:34:22 GMT

Toyota now offers Free maintenance and extends 0% loans

The incentives include zero-percent financing for as long as five years on 2010 Camry, Avalon, Corolla and Matrix cars; Highlander and RAV4 SUVs; and Tundra pickups. All consumers are now eligible for the service plan, not just repeat customers. The deals run until May 3.

“We're extending the two-year complimentary maintenance program, that proved to be very popular with existing Toyota owners in March, to all buyers in April,” Bob Carter, group vice president and general manager of Toyota brand sales, said today in a statement.

Toyota is trying to build on momentum in U.S. sales in March, when discount loans and leases helped the world's biggest automaker boost deliveries 41 percent after two monthly declines. The company has recalled more than 8 million vehicles to adjust brakes and fix flaws linked to sudden acceleration.

“Bargain hunters and Toyota loyalists” drove the sales gains, said James Bell, executive market analyst at pricing firm Kelley Blue Book in Irvine, California. “Once they get past those groups, it's getting tough to reach buyers who are looking at models from Ford, Subaru, all the others.”

Toyota initially announced incentives on March 2. Those offers expired yesterday, the same day U.S. Transportation Secretary Ray LaHood said the National Highway Traffic Safety Administration will seek to fine Toyota a record civil penalty of $16.4 million, the maximum allowed.

The automaker “knowingly hid a dangerous defect” related to accelerator pedals that can stick, LaHood said. Toyota said yesterday that it has moved to strengthen its “overall commitment to quality assurance.”

All standard service will be covered for two years under the new maintenance plan, Sona Iliffe-Moon, a spokeswoman, said in an e-mail. Customers also can choose a $3,000 rebate on Avalon rather than the loan, according to Toyota's Web site.

Source: [ Automotive News ]