When the time comes to negotiate the price, do so BEFORE you discuss the financing, BEFORE you admit you have a trade-in, and BEFORE you subtract your rebate. Some dealers try to charge MSRP (Manufacturer’s Suggested Retail Price, or sticker) instead of fair market value (or negotiated value) for vehicles with rebates. The dealer may lead you to believe that the factory-to-customer rebate is part of their dealer’s discount, subtract it from the MSRP, and announce that negotiations are over. Don’t fall for this. The dealer’s holdback already takes care of the dealer. The rebate is part of your down payment, and is not to be taken off the MSRP. The same goes for first-time-buyer and college graduate incentives.
Don’t let the dealer take manufacturer’s money meant for you. If you have ample cash on hand for your down payment (at least 20%), the special (1.9%) financing could have you money over the course of your loan. If you are short of cash for your down payment, you’ll probably want to apply the rebate to the down payment.
Again, make sure the rebate is applied as a cash down payment, and not just subtracted from the MSRP. A deal with a rebate should be written as follows: the dealership adds up the negotiated purchase price, applicable taxes, license fees, document fees, etc. into a grand total. Then your down payment, including the rebate and any cash you submit, is subtracted from that total. The resulting balance will be your final price (the amount due at delivery or amount to be financed).
