CAN A FACTORY REBATE BE A NEGOTIATION TOOL? QUESTION:
Can a new car dealer use a factory rebate amount as a negotiation tool to haggle over the final price of the vehicle?
Great question!!! Rebates come in many different forms. Sometimes they are on a particular car and you get it if you are buying that car and others you may have to qualify for. But never is a rebate negotiable, if you qualify for it according to the manufacturer you are entitled to get it and a dealership should never make this confusing. Dealerships are actually audited on this and will not get paid on the rebate if rules were not followed. You can negotiate on everything else if you are shopping at a store that negotiates.
My recommendation is that you also shop at a dealership that does not use negotiation tactics to see what type of deal you can get. Chances are, you will end up getting the same, if not a better deal at the “non-negotiation store” and you will have saved a HUGE amount of time.
Royal Automotive/Lexus of Tucson
Question: I am 22 years old and have recently landed my first job out of college, I want to purchase a new car and know I will need financing. During my first few trips to various dealerships I have been told that I have a very low credit score. I have no idea why my credit score is low because I have never taken out a loan before and always pay my bills on time. How can I improve my credit score?
ANSWER: Many people face this same situation in which they are told they have low credit upon investing in their first large purchase such as a vehicle or house. One of the reasons you are having a hard time is not because you don’t pay your bills on time, it is actually because you just don’t have enough credit history established; we call this unestablished credit. The most important thing to understand is that good credit does not just magically happen, it must be built. Unestablished credit is very common amongst recent grads and there are in fact specific programs that are available to students within 6 months of graduating and help students receive good deals and good rates even without a cosigner. Many new car manufacturers have these programs and they are often called “new grad incentives”. Having unestablished credit is much better than redeeming oneself from bad credit, so you are in good shape. The fastest way to build credit is to open a credit card and use it! The more frequently purchases are charged AND paid off on time, the better. A second good way to build credit is to raise the limit on existing credit cards, this alone makes us appear more credible to lenders. The idea of “holding credit” is basically being credible or trustworthy with money. If the credit card company trusts you with a larger sum of their money, so will the auto lender. So talk to the bank and see if any of your credit cards can be raised to a higher spending limit, just doing that should improve your credit score automatically. When you do take out a loan be smart about it. If this is your first loan, it is important to make sure you are able to make the payments now and in the future. One mistake many people make is not considering their changing lifestyles and unexpected expenses when deciding exactly what they can afford. Remember if you can pay this first loan off successfully you will be well on your way to establishing excellent credit.