Best Car Deals

New Car Financing and Cash Back Offers

With redesigned and refreshed 2019 models arriving daily at car dealerships, October is a great time to get an affordable deal on a new 2018 car, truck, or SUV. It’s the end of the traditional model year, so automakers are offering generous incentives to make room for the new models. Interest rates continue their slow upward march, making now the time to buy if you want to get a great rate.

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Last Updated: Oct 04, 2018

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Most incentives include low-interest rate offers or cash back deals that lower the price of your new vehicle. Though there aren’t as many zero percent interest rate deals as there were a year ago, there are still plenty to be found. While most of them are on slow-selling models or those with replacements on the way, there are some zero percent offers on brand-new models, such as the 2019 Ram 1500 pickup.

Getting the best incentive available takes some preparation. You’ll want to know how to figure out what a good deal is, where to find the best new car deals, how to compare competing offers, and how to take advantage of the best offer you find. You can start by reading our article on how to buy a car before you plunge into the new-car market.

What Are October's Best Car Deals?

There are several especially generous deals this month that include both zero percent interest and cash back. You’ll find them on vehicles ranging from the 2018 Nissan Leaf electric car to the 2018 Chrysler Pacifica minivan. While most zero percent deals have terms of three to five years, there’s a six-year no-interest deal on the 2018 Buick Encore with $1,000 cash back.

Shoppers looking for special offers with massive amounts of cash back won’t be disappointed this October. Volvo is continuing its $6,750 cash back offer on the V90 and V90 Cross Country wagons. Depending on the trim level, you can get as much as $7,000 bonus cash on a 2018 Cadillac Escalade. Even though it hasn’t been on the market long, Ram is offering up to $5,500 cash back on the 2019 Ram 1500.

A few months ago, General Motors started offering deals that took a certain percentage off the price of vehicles from Chevrolet, Buick, and GMC, and it's still offering them on many vehicles. For example, you can get most trim levels of the 2018 Buick Encore for 20 percent off MSRP this month. On a top trim model, that’s more than a $6,400 discount.

How Can U.S. News Help You Get a Deal?

No matter how generous the deal appears, it’s not a great deal unless it’s an excellent vehicle that fits your needs and budget. The U.S. News Best Cars team is here to help with the resources to guide you through the car buying and ownership process.

Unlike publications that rely on the thoughts of a single reviewer, U.S. News & World Report looks at hundreds of new car reviews. We use the consensus opinion of America’s top automotive reviewers, blended with quantifiable data on predicted reliability and safety, to come up with a score for nearly every new car, truck, SUV, wagon, and minivan you can buy. Those scores are used to rank vehicles against their peers. To ensure that you can trust our impartiality, our staff does not accept expensive gifts or trips from car manufacturers, and an independent company handles our advertising.

In addition to the overall scores, our site offers consumers tools to compare vehicles based on several factors that they tell us are critical to their purchase decisions, such as performance and price.

When it’s time to buy or lease, the U.S. News Best Price Program will connect you to local dealers offering guaranteed savings off MSRP. Buyers save more than $3,000 off sticker price, on average, when they take advantage of the program.

The car-buying process can be daunting to even experienced car shoppers. Our consumer advice articles will give you the knowledge and confidence to walk into a dealership and drive away with the right car at the best price. We cover how to buy a vehicle, how to get an auto loan, how to decide between leasing and buying, and how to negotiate a great price on the car you want. We’ll show you ways to avoid budget-busting add-ons, how to finalize the deal, and how to get the right insurance for your new ride.

Knowing how to take care of your car and the importance of having a financing deal in place before you walk into a dealership can save you thousands of dollars.

What Is a Car Deal?

Not every new car is as popular as a homecoming queen. Some don't hit their sales targets, and most cars are eventually replaced with redesigned or refreshed models. When vehicles near the end of their product cycles, automakers usually help dealers sell the remaining models by offering generous incentives to make room for the newer models.

Car shoppers can save big money when they take advantage of carmaker’s efforts to boost car sales. The best part? You don’t have to haggle to save thousands of dollars off the price of the car or its financing.

Most incentives fall into one of three categories. Lease offers, which you can explore on our lease deals page, give you reduced monthly payments, smaller amounts due at signing, or both. Cash back offers lower the price of the car, while financing deals discount the cost of your auto loan.

Though they’re called cash back deals, you won’t actually leave the dealership with a pile of $100 bills. Instead, cash back incentives simply lower the price of the vehicle. Different automakers use different names, including bonus cash, cash allowances, rebates, and cash back incentives. The name doesn’t really matter as long as they give you the deal.

Choose the $4,000 cash back offer on the 2018 Jeep Renegade Latitude trim, for example, and you'll drop the price from $21,845 to $17,845.

A significant cost of car buying is the interest you pay to finance your purchase. Smart buyers look beyond the monthly payment and evaluate a car deal by its total cost, including interest. With a financing deal, you can greatly reduce or even eliminate the cost of financing. When you lower the cost of your financing, you can get a lower monthly car payment, a shorter loan, or afford a nicer vehicle.

Here’s an example to show you just how much money you can save with a zero percent financing offer. The 2018 Toyota RAV4 will be replaced with a redesigned model later this year, so in some parts of the country, Toyota is offering the compact SUV with a zero percent financing offer for five years. Let's say you choose the RAV4 Adventure trim, which has a $27,800 sticker price. Since you’re paying no interest, you just divide the price by the number of months in the loan term, which in this case is 60, to find that you’ll pay about $463 per month.

Using a car loan calculator, you'll find that the monthly payment on the RAV4 would be about $522 per month if you finance your loan at the current average interest rate of 4.79 percent for five years. That’s an extra $59 per month compared to the zero percent deal. Over the life of the loan, you would pay an extra $3,540.

A zero percent financing offer is the best interest rate deal you can get because it eliminates the cost of financing, but any offer that's significantly below market interest rates will save you money. Currently, average auto loan interest rates are hovering a bit below 5 percent for consumers with good credit scores.

Automakers extend their best financing deals to shoppers with excellent credit. If you have bad credit, you’re unlikely to find a great deal. If your credit isn’t great, you're far better off getting a pre-approved financing offer from a bank, credit union, or another lender instead of relying on a dealer-arranged loan or manufacturer-subsidized financing.

Many consumers think that if they get a car deal they can’t negotiate any further. Car salespeople may try to reinforce that belief, but it’s simply not true. You should negotiate just as hard to further reduce the price of a vehicle with a special incentive as you would with any other vehicle purchase.

New car deals come loaded with rules, restrictions, and fine print. Only specific models or even trim levels of those models are subject to the deals. Some offers are limited to a certain number of vehicles or a percentage of a dealer’s stock. Many deals only apply to car shoppers who live in specific areas. Our Best Price Program can help you identify deals that you qualify for. You can also contact your local dealer directly or chat with an internet sales representative. Paying attention to a deal's expiration date is essential. Miss it by even a day, and you'll likely miss out on the discount.

You can potentially save even more if you're willing to put a bit of time and travel into your car-buying journey. Because of manufacturer discounts and direct-to-dealer incentives, different dealers can pay different amounts for the same car. If one dealer paid less for the vehicle you're considering, they'll have more room to make you a great deal. Checking with dealerships where the car you're looking at may not be as popular as others is also an excellent way to save money. Looking for a hybrid? Check rural dealers. Looking for a full-size pickup truck? Call dealers in the city and suburbs.

How Do You Know if It Is a Good Deal?

You should never assume that every advertised deal is a good deal. With some simple math, however, you can compare offers to see which one has the lowest total cost. While you want to make sure that the monthly car payment fits your budget, only comparing the monthly payment is an awful way to buy a car. You want to look at the total cost of the vehicle, including the cost of financing it. Not considering all the costs is a mistake that can cost you money for years.

While the salesperson will happily do the math for you, it's crucial that you do it yourself so you understand all the numbers and make sure no sneaky extras find their way into your car deal. Car salespeople are trained to incrementally move you to the deal they want to you to take. Pulling up the calculator app on your phone will send a strong signal that you know what you're doing.

To determine the total cost, multiply the monthly car payment by the number of months in your loan term. Add any down payment that you're making, plus the value of your trade-in, and you'll have the total cost of the vehicle (excluding taxes.) Here's an example: You have a loan with payments of $300 per month for five years, and you plan to pay $3,000 as a down payment. Multiply $300 by 60 months, then add $3,000. The total cost of the car is $21,000.

You can find your monthly payment by using a car loan calculator. You simply put in the amount you’re financing, the interest rate, and the length of the loan. It will do the compound interest calculation to show you the monthly payment.

One of the reasons why car buying can be confusing is that dealers want to lump the cost of the car, the cost of the financing, and the value of your trade-in into one transaction. You, on the other hand, want to keep each of those components separate. You can keep financing out of the deal by getting a pre-approved offer from an outside financial institution before you go to the dealer. If the salesperson wants to sell you financing, they’ll have to beat the deal you already have in hand. You can take the trade-in out of the game by selling it yourself to a third party or another dealer, though doing so may cost you additional sales tax on the purchase of your new car.

In many cases, car buyers will be offered a choice between low-interest financing and cash back. We’ll use a couple of this month’s deals to illustrate how to compare the offers. You can choose from a $2,500 cash back offer on a 2018 Hyundai Elantra or opt for a zero percent financing deal for six years with $1,000 cash back. We’ll assume that you have chosen the midrange Elantra SEL with a price of $18,850 and that you're not making a down payment or trading in a car.

Since you get $1,000 cash back with the zero percent deal, the total price you’ll pay for the car is the sticker price minus the $1,000 cash back, or $17,850. Divide that amount by the 72 months in the term of the loan to determine that your monthly payment is about $248 per month.

Opt for the $2,500 cash back offer, and you’ll lower the price of the car to $16,350. However, you’ll have to finance that amount at the current market interest rate, which is averaging 4.87 percent this month. Using a car loan calculator to compute the compound interest, you’ll find that your monthly payment would be $262 per month.

The $14 per month difference might not seem like much, but over the term of the loan, the cash-back-only offer would cost you about $1,008 more than the zero percent deal.

Even if a deal has massive amounts of cash back or zero percent financing, you can’t assume one type of deal is better than another without doing the math.

Many dealers will encourage you to stretch out your loan past five years so you can afford a more expensive car or get a lower payment. Taking out a longer loan puts you in a precarious financial position in a couple ways. First, you'll likely owe more for the car than it is worth for an extended portion of the loan term. Second, in many cases your vehicle's warranty will expire before you pay off the loan, putting you at risk of having to pay for costly repairs while you're still making car payments. Bottom line: If you can't afford the car with a five-year or shorter loan, buying the vehicle puts your financial security at risk.

Completing the Deal

Once you negotiate your best deal with the salesperson, you'll head to the dealership's finance office to complete the paperwork on the sale. They'll also set up your car loan if you're taking advantage of a financing deal or getting an auto loan through the dealer. You probably just want to jump in your new ride and get home, but you still have a bit of work to do.

There's a multitude of paperwork required to purchase, finance, and trade in a car. You need to look at every document that you're asked to sign, make sure you understand it, and ensure that it's complete and correct. Verify that the paperwork matches the deal that you negotiated and no spaces are left blank. Insist that any fees are explained and any add-ons that snuck their way into the documents are removed if you don’t want them.

Pay close attention to the purchase price, the interest rate, the length of the loan, and the amount (if any) you are receiving for your trade-in. If you find errors or omissions, don't sign the papers until they are corrected or explained to your satisfaction. If you are pressured to sign incorrect documents with the promise that they will be fixed later, consider it a red flag and be prepared to walk away from the deal if they are not corrected before you are asked to sign.

Sometimes a dealer will allow you to take the car home before the financing is finalized. While it can be tempting, it’s risky to do so. It’s called Yo-Yo financing. What often happens is that several days later you get a call from the dealership saying your financing cannot be approved with the original deal, so you have come back in and sign some new papers. When you go back to the dealer, the new offer is for much more expensive financing than you initially agreed to.

While sometimes it's true that you could not qualify for the original financing, some unscrupulous dealers know all along that you won't qualify for the first deal. They're just trying to get you hooked on the new car before telling you that you have no other choice but to take the more expensive offer.

We research deals based on representative ZIP codes across the country. We strive to keep this list up to date, but offers can change without warning. Some car specials are limited to a certain number of vehicles or a percentage of dealer stock, and inclusion on our site does not guarantee that a particular deal will be available at your local outlet. The easiest way to find out if you can take advantage of an offer is to click the orange button next to the car that you're interested in, and we’ll search for a great price at a local new car dealer.

Our best car deals include purchase deals for ToyotaNissanFordHondaChevroletHyundaiKiaDodge, RamJeepMazdaBuickGMCSubaruVolkswagenAcuraCadillacPorscheMercedes-BenzAudiBMW, and Lexus vehicles. Our expert researchers and journalists also search the market for this month’s best lease deals and best used car deals. We’ve done the research to help you find a great ride at a great price.

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