Check for incentives

A little time spent at the computer can pay big dividends when you buy

Behind-the-scenes dealer incentives

Automakers often give dealers extra money in the form of rebates or holdbacks when they sell certain models. The dealer can keep the money or pass it along to the buyer in the form of a lower price. Knowing about them can help you better determine how much profit margin the dealer has to work with. You can find those figures in Consumer Reports New Car Price Reports or on Web sites, such as Cars.com and Edmunds.com.

Expert tip

Other types of dealer incentives, such as volume discounts, are virtually impossible for a consumer to track, but you can take advantage of them by having multiple dealers bid against each other. See Get Price Quotes.

Customer incentives

Go to the automakers' Web sites for the latest national and regional programs, keeping these tips in mind:

• Cash rebates usually come from the automaker and can be applied to the down payment, which reduces the amount you need to borrow. Rebates don't affect the dealer's profit, so don't be hesitant to try for a lower price on the car in addition to the rebate.
• Low-interest financing is often heavily promoted, but it's usually available only to people with good credit scores. Check in advance to see if you qualify. If not, you might find a lower interest rate elsewhere.
• Discount pricing, such as "employee pricing," can shave hundreds off a sticker price. But since this discount comes from the automaker, you can often go even lower by bargaining with a dealer.
• Other programs, such as free or discounted gasoline, trade-in credits, or a buy-back guarantee, can add extra value to a deal. But check the numbers carefully; a different incentive could save you more money.

Government incentives

The federal government has recently passed two bills that help car buyers save money.

• Cash for clunkers: This program, called the Car Allowance Rebate System, gives you a credit of $3,500 or $4,500 if you trade in an older gas guzzler for a new vehicle with better fuel economy. The money goes to the dealer and is applied to the new-car price. At press time, however, the program's future was unclear. Get details at Cash for clunkers.
• Tax deductions: If you buy a new car in 2009 (between Feb. 17 and Dec. 31), you can deduct state and local motor-vehicle sales and excise taxes from your federal income tax. There are limits, so check the details at Consumer Reports Auto Crisis Center.
• Green-car tax credits: If you buy some hybrid, diesel, or natural-gas models, you can get a tax credit on your federal income tax. Check www.fueleconomy.gov/feg/taxcenter.shtml for eligible models. Hybrids are also tax exempt in some states.