When a car dealership offers a cash allowance as an incentive, what exactly are the benefits?

In other words, what is a 'cash allowance'? And, would it be helpful in purchasing a car?

When a car dealership offers a cash allowance as an incentive, what exactly are the benefits?
I am a dealer. The factory will sometimes make a cash incentive available to the customer to sell more vehicles. The sticker price on the car does not change. You can choose to apply the incentive to the purchase price of the car or you can buy the car and get the cash in the form of a check sent to you. The incentive does not cost the dealer anything, it is offered by the factory. For example: you purchase a car with a sticker price of $20,000 from a dealer for $17,800. If the car has a $1000 cash incentive, you can apply the incentive to the down payment of the car or get a check for the incentive after the purchase. Where most confusion comes into play is in advertising. When a dealer advertises a vehicle for a really cheap price it always has any and all cash incentives applied to the price as advertised. Always check the small print at the end of the ad. Hope this helps - Gary
Reply:Feel confident in when I say that all new vehicles are regulated in pricing by a law that was passed years ago to keep dealers from charging whatever they wanted to......they don't have to sell it to you at the sticker price....some really "hot" cars are sometimes amended with a "Market Adjustment"......a Shelby Cobra GT we had sold for $15000 over the sticker price......the "cash allowance" is most of the time called a "rebate" and comes from the manufacturer....not the the dealer and it is your discount to take......not up to the Dealer (not to say that they may not try to hide it from you).......ask for the amounts of all "national" rebates......for any loyalty rebates that you might be entitled to.....any special rebates because of where you work or maybe a student rebate.....are there any "dealer cash incentives" that might help you get a lower price.....ask all of these questions and work the absolute best price you can get.....check EDMUNDS.COM for a guide.....it will give you the invoice cost and a TRUE MARKET VALUE of the vehicle you are looking at.....NEVER..NEVER...NEVER work payments with the salesperson....."rule of thumb" $20 per thousand will give you a good idea of what the payments will be at.......$20,000 vehicle figures about $400....if you are looking for $200...forget it ...no way!!!.....when you think it is down to the best price......leave the dealership and go check with Edmunds to make sure you are not overpaying......best way is to go after hours....write all of the options on the one that you like and research that before you go in.....then tell them what you will pay......"No we can"t" ....then walk out!!!.....don't be unrealistic or a jerk!!.....be fair with the Edmunds guide and you will get a good deal........the guide will not tell you about loyalty rebates......check this out especially if you are going from same brand or make......good luck!!!....rambled a little from the question but hope this helped!!
Reply:basically they give you lets say $2,000 cash, but what you dont know is the car is priced $2,000 above what it should be. The incentive is you have $2,000 in your wallet, which is nice, but you also paid $22,000 for a $20,000 car... thats what i think anyway.
Reply:Dealership cash could be one of two things. If it is offered directly from the factory, and almost everywhere else you go to purchase that new vehicle, you will get that factory incentive. (there are very few dealerships that do NOT participate in those programs) If say the dealership sent you a "coupon" for a certain amount to be taken off a purchase, chances are they have upped the price on those vehicles to make up for the check they are offering you off. You may save a little money, but certainly not the full check amount. They could be offering it only on certain vehicles that they want to get out of their inventory. You may get a bargain there, but you may not. There may be manufacturer's out there that actually offer the customer the cash back, but the majority of any rebates/incentives, customer cash is taken off the price of the car.

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