A monetary incentive offered by a vehicle manufacturer or dealership to reduce the purchase price of a new car. It functions as a direct price reduction, lessening the overall cost the buyer finances or pays upfront. For example, a buyer might negotiate a vehicle price of $30,000 and then receive a $2,000 discount applied directly to that price, bringing the final purchase price to $28,000 before taxes and other fees.
This financial offering can significantly impact a buyer’s affordability and decision-making process. Historically, these incentives have been used to stimulate sales during periods of slow demand or to clear out older inventory in anticipation of new models. By lowering the initial price, it can make a vehicle more accessible to a broader range of consumers and potentially reduce monthly payments for those financing the purchase. It also can influence a buyer’s choice between different models or brands, encouraging them to opt for a vehicle offering a more substantial incentive.
