ZIP code

Zip Codes: A key to unlocking local deals

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An increasing number of automaker websites are asking for a car shopper’s zip code. Give it.

Nearly all automakers offer regional retail rebates that vary by metropolitan area or region. Gone are the days when a TV or magazine ad identified all the incentives. Simply, a shopper should not go looking for a new vehicle until they’ve researched all the retail rebates available.

“The car market today is extremely competitive so dealers and automakers may think nationally but they act locally,” said Brad Korner, general manager of AIS Rebates. AIS is a unit of KBB.com parent Cox Automotive. “They are very strategic with incentives – putting money where they feel it is necessary to move inventory. The zip code helps determine any local or regional incentives that may be available to consumers.”

Also: Kelley Blue Book Best Buy Awards of 2017

No longer one-size fits all

Years ago, national rebates ruled the auto industry. A $1,500 rebate on a Pontiac G6 was available in San Diego, Peoria and and Portland. (pick your state). That was it, generally speaking.  But the one size fits all philosopy of the past has been replaced by a strategy that studies local inventory levels, such as slow-selling models, along with competitive conditions. A regional incentive might be triggered even if an automaker’s sales are doing well. The automaker might figure this is the perfect time to grab localized market share from a competitor.

“Lately, we’ve even seen incentives applied to individual vehicle identification numbers. So a specific, slow-to-move vehicle may have some incentive in place to help it sell,” Korner said.

Then there’s another variable when shopping for a new car or truck that the industry calls a conditional rebate. This is manufacturer-to-dealer cash on a specific model or models that is not publicized to the public. The amount also varies by metropolitan area or state. The dealer has the option of giving the buyer the entire amount of the conditional cash to sweeten the deal, a portion of it or none at all. The amount of this rebate can be a significant.

Also: Class of 2018 – New Cars Ready to Roll

Differences are real

For example, a recent analysis by AIS Rebates of the retail and conditional incentives in three separate zip-code areas revealed the incentive differences for an identical Ram pickup truck. In the first example involves a four-wheel-drive 2017 Ram 1500 Crew cab, Big Horn model with a gasoline-powered V-8.  Looking at three zip codes, 48103 in Ann Arbor, Mich.; 73101 in  Oklahoma City, Okla., and 85015 in Phoenix, Ariz., showed that the guaranteed retail cash incentives varied. In Ann Arbor it was $2,750, up to $3,750 in Oklahoma City, and $4,000 in Phoenix. However, total incentives available ( both retail and conditional) were similar but not identical: $5,250 for Ann Arbor and Oklahoma City, and a bit higher in Phoenix at $5,500.

Buyers should always ask if there is a manufacturer-to-dealer rebate on the vehicle being shopped or on other models offered by that brand.

Comparing a second Ram model, a four-wheel-drive 2017 2500 Tradesman Crew Cab with a gasoline engine, the guaranteed retail cash was identical in all three zip codes, $1,750. But the total incentives (guaranteed and conditional) varied widely, $4,750, Ann Arbor; $5,750 Oklahoma City, and $4,250, Phoenix.. 

Unfortunatley, a buyer cannot shop the country for the best deal sweetened by the highest retail and conditional incentives. These programs are based on where the vehicle will be registered. An automaker will not give a Des Moines resident the same retail and conditional incentives offered to Chicagoans, for example. The intent is to protect the dealer network from buyers who might search the country for the best deals.


 

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