How New Car Incentives Work


Many drivers know they want a new car, SUV, or truck — and may even know the exact manufacturer and model they wish to own. The challenge then becomes finding the right vehcle for the right price point based on your budget.

One way manufacturers and dealerships sweeten the pot, so to speak, is by offering incentives on certain models. This allows savvy shoppers to drive away with the new vehicle they wanted with a favorable price tag somewhere below the full MSRP.

Here’s more on how new car incentives work.

New Car Incentives 101: How They Work

There are a few different types of incentives for new vehicles to explore.

Cash-back rebate

Perhaps the most popular is the “cash-back rebate.” The premise is simple: You buy the car within a certain timeframe; the manufacturer provides a rebate ranging from hundreds to thousands of dollars. The amount of the rebate is typically knocked off the total price of the vehicle rather than being paid out later, as some other kinds of rebates tend to do.

It’s important to note that these cash rebates come from the manufacturer rather than the dealerships themselves. However, dealerships are legally required to pass on the full rebates to buyers.

Say you’re looking for an SUV. Current Jeep incentives are going to be available across the U.S. as they originate with the manufacturer. Whether or not specific dealerships are offering any additional incentives may vary from location to location, but the financing and leasing incentives are coming from the Jeep brand itself.

Lowered interest rates

Drivers considering leasing a vehicle may qualify for lowered interest rates if they meet certain criteria, like having strong credit history. These lease deals can reduce the overall amount you will pay over the life of the contract.

Higher residual value

The residual value of a vehicle is how much it will be worth at the end of the lease based on depreciation estimates. As Bankrate explains, higher residual value equals lower monthly payments. So, automakers may be willing to offer subsidized residual value as an incentive to sign a certain lease deal.

Basically, it’s beneficial to you as the driver to enter into a lease agreement with less depreciation — the expense you are ultimately paying for. This can be achieved through a few different means, including the aforementioned lowered interest rates or optimizing the residual value of the vehicle.

Tips for Finding New Car Incentives

How can you go about finding new car incentives? There are a few places to check as you’re planning when to make a move on buying or leasing a vehicle.

A great first place to check is each manufacturer’s website. Keep an eye on the offers over time, as they may change – especially as model years cycle through. It’s an industry “secret” that certain holidays, ends of calendar months, and ends of model years can be the best time to find incentives because manufacturers are trying to get rid of the models they have in stock to make more space.

Another way to sniff out incentives is to reach out to local dealerships. As we mentioned earlier, they have to let you know about all manufacturer incentives on the table. They will also be able to fill you in on any deals they are currently running on top of manufacturer incentives, allowing you to get a solid idea of what’s available locally for what price.

Finally, third-party auto industry shopping and review sites — like Edmunds, Kelley Blue Book, J.D. Power, etc. — keep a running list of new car incentives.

At the end of the day, maximizing your incentives can knock money off the total price of a vehicle you are buying or leasing.


Hi. I'm Mursaleen Siddique, The guy behind I'd rather call myself a struggling Blogger. I love Blogging with WordPress, Covering Tech, General Topics, Graphic & Web Design Inspiration., Feel free to get in touch via mentioned social media platform or E-mail me at hello[at]
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