Save Thousands on a New Honda Vehicle by Knowing All Dealer Incentives

In Buying a Car Using the Web I wrote the following:

Order a cost report on the car you want at www.ConsumerReports.org. (Cost: $12) This information will verify the Edmunds data and also reveal any dealer incentives (rebates manufacturers pay dealers to sell a car).  If the dealer receives $500 for selling your car, for example, his cost is $500 less than the listed invoice price.

Doing this saved me a few hundred dollars on the purchase of my last two cars (the dealers didn't have many incentives on the models I wanted.) It was well worth the effort for me (the $12 report was all that I needed), but for others it can REALLY be worth it. Consider the following incentives Bankrate recently uncovered on some Honda models:

• For the Ridgeline, the factory is offering dealers a total of $2,634 in incentives and leasing and finance deals.
• The Pilot has $2,504 in incentives, which had almost no incentives a year ago.
• Odyssey carries $1,701, while the Element comes with $995.
• The Accord has $2,119 in dealer incentives.

The piece also notes why these numbers are important:

Although a dealer may not tell you about these incentives, they are legitimate bargaining chips in price negotiations.

My experience is:

1. They will NOT tell you about the incentives -- you need to find out about them in advance.

2. Once you know the "true" price of the car you want (including incentives), you can save yourself a TON of extra money. Especially if you shop for a car at the right time (which can also be at the end of the month or year when they are trying to meet their quota.)

Comments

[Brent]

It's also good to keep in mind the same thing applies for Acuras, which are made by Honda. If you're shopping when they're trying to get rid of last year's models, there is typically at least a $1000 dealer incentive for those cars.

[Tyler]

Of course this applies to anyone that is crazy enough to actually go in debt on on a new-to-one year old car. My advice, pay cash and/or BUY USED!

[Joe]

Crazy? I bought an Acura last year and went into debt. My debt is at 2.9% I put the $20K I financed in stocks. Today, I've got about $24,600, while paying out less than $600 in interest. By my count, I'm $4K better off than if I'd paid cash. A disciplined investor can afford to use debt wisely. I do agree with Tyler, though, if you're not disciplined, or you can't beat the interest rate you're paying on the loan, use cash and buy used -- it makes sense in most cases.

[FMF]

Joe --

Basically you were lucky. There's no way to predict what the stock market will do in the short term -- especially in a year or so. Your $20,000 could as easily be at $15,400 right now.

[Brad]

He was fortunate that his money grew in that time period, yes. But he could still have beaten the 2.9% in a risk-free investment and come out ahead in the end by financing. I agree with him that there's nothing crazy about it if you have the right opportunity.

[Brent]

I don't think it's fair to call someone who buys a new car crazy. For some of our jobs, keeping up appearances (including owning a 'nice' new car) is expected. When you can get an interest rate lower than your ING or HSBC savings account, it's more crazy to pay cash.

[Borealis]

I would have liked to have bought a used Honda in 2006, but the resale values of Hondas is very strange. This is what I ended up with:

Price paid for new CRV in 2006 - $24,500

Today’s Kelly Blue Book price for 2006 CRV with 22,000 miles
Retail - $24,950
Private Party - $21,600
Trade In- $18,450