ACV facts & figures
Outside of having the right inventory for your customers, sometimes buying decisions come down to incentives. These benefits, whether that be cash rebates or low-interest financing, are available to bring the price down. There are different types of incentives that appeal to different types of car buyers. Below we break down some of the major new car incentives you can implement to entice customers, bringing them into your dealership and closing the sale.
What Is a Car Incentive or Deal?
Car incentives are benefits you can offer to customers to entice them to purchase vehicles. For example, customers might get $1,000 back on their qualifying vehicle purchase. A cash incentive could be enough to push them toward a sale.
The vehicle manufacturer typically offers new car incentives to customers, which means your dealership generally won’t have to worry about direct expense. You can offer additional new car incentives but may not want or need to due to low supply and high demand1. As you know, when your dealership sells cars quickly at full price, it enhances your bottom line.
Types of New Car Incentives
Car buyers are motivated by a wide range of incentives — from cash rebates and low-interest financing to non-cash incentives like warranties. By offering and honoring manufacturer incentives, you give customers a reason to choose your dealership over others.
Cash Rebates and Rewards
Different car shoppers know what they want, while others search for incentives to steer them in the right direction. Many type "What car has the best rebates right now?" on their keyboards, a question garnering about 1,400 searches per month. Essentially, shoppers hunt for the best deals available and getting a discount on a car’s sticker price will bring them to your dealership’s door. Some customers might already be aware of college student or first responder cash rebates2 before they enter your dealership. Be aware of these incentives and have them in your back pocket if you are having a tough time agreeing on a number to move the car.
Low-interest Financing
In 2024, over 80% of new car purchases were made using financing3. According to Q4 2024 reporting, the overall average auto loan interest rate was 6.53% for new cars4.
Higher interest rates equal higher monthly car loan payments, making it more difficult for shoppers to afford vehicles. Implementing low-interest financing solves this problem.
Low-interest financing incentives typically only apply to new vehicles. With low-interest financing, car manufacturers offer car loans to eligible buyers (individuals with reasonably high credit scores and lengthier loan terms) at lower interest rates than are widely available elsewhere.
These offers are some of the best car deals right now. They make the vehicles more affordable to customers and make them more likely to choose cars from that manufacturer.
The low APR financing incentives have limitations; deals can't be combined with cash incentives5.
Lease Deals
Car manufacturers or dealerships sometimes offer special car deals on leasing. For instance, you could provide discounts on monthly payment or reduce the amount due at signing, enhancing the affordability factor.
Dealer Incentives
Manufacturers offer dealer incentives to sell specific models or meet sales quotas. This means you might get discounts when buying vehicles, marketing support, or rebates on sold vehicles. You might choose to pass these benefits to customers by lowering vehicle prices.
Government Incentives
Inform customers of the new car incentives offered by the government (federal, state, and local levels) like tax credits6. Under the Inflation Reduction Act, buyers interested in electric vehicles or plug-in hybrids could receive a $7,500 tax credit on certain vehicles7.
Non-cash Incentives
All other incentives you can offer to move potential buyers to buy new cars fall under non-cash incentives. Below are a couple of examples:
- Free maintenance offers that your service department can provide like tire rotations and oil changes
- Extended warranties on the powertrain, or free gap insurance
- Vehicle equipment that your parts department can easily provide like a bike rack, luggage carrier, or all-weather floor mats
These perks add value to the customers' purchases, making them more likely to shop at your dealership over your competitors.
Build up your Dealership’s Car Inventory with ACV Auctions
Sometimes, even the best car incentives aren’t enough to get a buyer into a new car. Having a healthy supply of used car inventory can easily convert these new car prospects into used car buyers with the right inventory mix. With ACV Auctions, you get access to a nationwide selection of wholesale vehicles, each backed by a 200-point inspection — from OBDII scans to engine sound. It’s everything you need to source your lot with confidence. Sign up today.
Sources:
- Grieve, P. (7 July 2023). Can You Still Haggle for a New Car? How the Auto Market Is Changing. Money. Retrieved April 1, 2025, from https://money.com/haggling-car-dealership-is-disappearing/
- Best Car Deals and Incentives. Edmunds. Retrieved April 2, 2025, from https://www.edmunds.com/car-incentives/
- De Querol Cumbrera, F. (20 December 2024). Share of used and new U.S. vehicles with financing 2022-2024. Statista. Retrieved March 26, 2025, from https://www.statista.com/statistics/453000/share-of-new-vehicles-with-financing-usa/
- Bradley, S. (18 March 2025). Average Car Loan Interest Rates by Credit Score. Nerd Wallet. Retrieved March 26, 2025, from https://www.nerdwallet.com/article/loans/auto-loans/average-car-loan-interest-rates-by-credit-score
- Best Car Deals and Incentives. Edmunds. Retrieved April 2, 2025, from https://www.edmunds.com/car-incentives/
- Hardesty, C. (11 March 2025). Car Dealer Incentives Defined. Kelley Blue Book. Retrieved April 2, 2025, from https://www.kbb.com/car-advice/kelley-blue-book-complete-guide-to-incentives/
- Valdes, R. (14 January 2025). How Do Electric Car Tax Credits Work in 2025? Kelley Blue Book. Retrieved April 2, 2025, from https://www.kbb.com/car-advice/how-do-electric-car-tax-credits-work/
