Many car makers cut back on incentives in June 2010, and lower sales were one of the consequences. General Motors sales in June dropped 13 percent from May. Even Honda--normally a strong competitor--saw its sales slip nine percent. One of the biggest losers was Toyota, which saw a decrease of 14 percent in sales from May to June 2010.
Toyota’s Big Incentives
Toyota has come back with big incentives in July in an attempt to boost lagging sales. It’s offering a choice between Customer Cash or zero percent financing on many of its most popular models. Camry, Corolla, Matrix, and RAV4 models qualify for $750 Customer Cash (in effect, a price discount) or zero percent financing over 36 months. Bigger savings are available on the Highlander and Tundra models.
Not sure which option is best for you? Use Edmunds' Low APR vs. CashBack calculator. You’ll need to know the price of the vehicle and the local tax rate to use it. It’s also useful to know the interest rate you qualify for without incentives, but Edmunds includes the standard market rate if you don’t input your own figure.
Take Advantage of Everything You Can
Auto manufacturers don’t come out with Customer Cash or low APR offers out of the goodness of their heart. These programs are big business with millions of dollars at stake. Incentives are used as a tool to entice buyers to purchase specific models. If car makers didn’t have to use them, they wouldn’t. Instead, they would hold onto that cash as added profit to pad their bottom line.
The savvy car shopper takes full advantage of manufacturer incentives when they are available. Remember, it’s a win-win situation. A better deal for the consumer means more sales for the manufacturer. They may not make as much profit per vehicle, but car makers are benefiting in other ways, such as reduced interest expenses by reducing inventories. Many are also desperate to make way for 2011 models that guarantee a fresh influx of enthusiastic buyers.
Toyota calls their sale the National Clearance Event, but deals are parceled out locally. This means that visitors to national websites are required to input their ZIP code to see what deals are offered in their region. Toyota’s incentives are good through August 2, 2010.