Hidden Incentives on Leftover 2009 Models
Now that 2010 models have started hitting showrooms, car makers want to sell the leftover 2009 models as quickly as possible.
You've probably been noticing "clearance sales" commercials from several different manufacturers. Incentives such as cash back rebates and low APR financing have been increasing steadily on leftover 2009 models.
With used car prices projected to keep rising until the end of this year, it makes sense to consider buying a new leftover model when you factor in all the discounts and incentives.
September is usually a great time to buy since you're still likely to have several options and colors to choose from. There's a very fine balancing act when it comes to buying a leftover model. The longer you wait, the better the deals get, however, your color and options choices become very limited. Do you really want to be stuck with a lime green car with no air conditioning?
This is not the case for all vehicles, especially smaller, high mpg cars that sold well during the "cash for clunkers" program. Many of those leftover 2009 models have already been depleted, so your chances of getting a great deal now is low. There are only about 1,000 '09 Toyota Corollas and 1,500 Ford Focus' left nationwide. That's not much when you consider these are 2 of the top 10 selling cars in the US.
If you're in the market for an SUV or luxury car, you're in luck. There are some truly exceptional deals to be had, mostly through hidden dealer incentives.
For the 2009 Range Rover, and Range Rover Sport, the only advertised incentive you'll see is 0-2.9% APR financing. What you won't see is the $5,000 - $9,000 hidden incentive being given to dealers each time they sell one. The 2009 Land Rover LR2 and LR3 also have between $3,000 and $4,000 in hidden incentives.
Mercedes Benz, which never offers cash-back rebates to buyers, has some huge hidden dealer incentives. For the 2009 CL, CLK, E Class, M Class, and S Class models, they are giving up to $15,000 in cash to dealers for each car sold. For the 2009 C class and GL, they're giving between $5,000 and $10,000 in cash incentives. This is in addition to 1.9 - 2.9% APR financing on some models.
BMW is also offering hidden dealer incentives. The 2009 3-Series, 5-Series, M5, and X5 have incentives ranging from $2,000 - $4,500.
Infiniti is "officially" offering 0 - 3.9% APR financing on most of their 2009 models. What consumers don't see is the $7,000 hidden dealer incentive on the QX56. They're also offering between $5,000 and $6,000 on the M35, M45, FX35, and FX50. The EX35 and G37 have $2,500 - $4,000 in dealer incentives.
Now before you go out to one of these dealerships demanding thousands of dollars in discounts, keep in mind these incentives are technically "hidden" and the dealerships are not required to acknowledge them nor are they required to pass any of their cash incentives to you, the buyer.
In most cases, the dealer will discount the cars heavily and pass on some or all of their incentives. The dealer still makes money, moves leftover inventory, and the customer gets a great deal. Dealers are more likely to pass the incentives towards the end of the month when they're trying to meet quotas.
Our recommendation is to use our Car Buying Strategy near the end of the month. Contact as many dealers as you can to ensure you'll get at least one dealer who's willing to pass the full incentives over to you.
My Recommendation for Car ShoppersTrueCar No-Haggle, Edmunds Price Promise, and 1-800 Car Show are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
California Residents - Important:There is a new online car buying service called Roadster, available only to California residents, which I highly recommend you try - especially if you hate the stress of haggling with a car salesman. They provide an expert concierge who negotiates the price of the car and delivers it to your home with zero hassle - you never have to interact with a dealership. Here is my in-depth review of Roadster and why I recommend it.
- Gregg Fidan
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About: Gregg Fidan
Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.
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