Consumer Car Buying Advice Blog

You can use a rebate with a bad credit car loan and it can make buying a new car much more affordable in more ways than one.

The advantages of a new car rebate

At Auto Credit Express, bad credit car loan applicants frequently ask us if they can take advantage of a new car rebate when purchasing a car with a subprime lender. The answer is a resounding “yes”, and here’s why: at least a portion of the rebate can be counted towards a cash down payment.

Rebates and bad credit car loans

A rebate with a bad credit auto loan works pretty much the same as a rebate with a regular loan. But it can give you an even greater advantage if you are financing with a bad credit car loan. As long as the rebate is entered below the selling price, it acts as a down payment. Customer cash works in the same way and since it is “cash”, it is always entered on the down payment line. Some bad credit lenders will still want some actual cash from the customer, but many of them will accept the entire amount as the customer down payment.

An example

A good example of the difference dealer cash makes is the 2009 Kia Spectra. Although the Spectra has been replaced by the 2010 Kia Forte, there still are some 2009’s available and to move them off dealer lots, Kia is putting $3,000 customer cash on the Spectra. So, what does this mean for you?

Let’s price out a 2009 Spectra. The 2009 EX model with the I-4 engine and automatic transmission also includes air conditioning, 4 wheel disc brakes, power windows, power locks, cruise control and all the air bags. The MSRP is $17,245 and dealer invoice is $16,165. If you subtract the dealer cash, the selling price is $16,745 (remember, dealer cash is subtracted from the selling price, not treated as a down payment). You can probably negotiate another $600 of the selling price so with a sales tax rate of 7% plus $200 in fees (estimated), we’re looking at $17,475 or so. Now, subtract the $3,000 in customer cash and that leaves an amount to finance of $14,475.

The Bottom Line

Rebates and customer cash are a great way to not only make a vehicle more affordable, but also contribute towards your down payment. In the case of the Spectra, you can buy a vehicle with a retail delivered price of over $18,500 for just over $14,000. The Spectra also comes with a great warranty – 5 years/60,000 miles for the basic warranty and 10 years/100,000 miles on the powertrain, which means there’s a good chance you’ll save money by not having to purchase a service contract.

For more information on bad credit auto loans, visit our web site at www.autocreditexpress.com. In addition to researching bad credit auto loans, you can also fill our secure application online in the comfort of your home.

Tags: auto loan, bad credit, bad credit auto loan, bad credit car loan, bad credit car loans, bad credit lenders, car loan, car loans, kia forte, kia spectra, rebate, service contract

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