Reed GraffDallas, Texas

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@itsreedgraff·November 11, 2026·16 views

Why do manufacturers give away cars?

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Why do manufacturers offer huge cash rebates and 0% APR incentives? Tons of people from my previous video didn't even believe that this is possible to get or only exist on cars that nobody wants. But in reality, about 80% of manufacturers offer 0% APR on at least one model during the year.

And you might think that's just on vehicles that aren't selling, but well, that's actually not the case. Let's look at three types of incentives. First is customer cash and subvented rates.

9% for 72. This category also includes low lease money factors and rebates for loyalty, conquest, military, college grad, or Costco. The second is dealer cash incentiv.

Sometimes manufacturer incentives aren't just for the customer, but as dealers, we also get incentives to sell specific customer cars from manufacturers and can pass those savings onto our customers. Along with additional deals, dealers might offer on specific inventory, like cars that have been sitting on the lot for a long time. We'll often sell those specific vehicles at a loss just to move inventory, or things like a dealer paying over appraisal value on your tradein just to stack inventory for their pre-owned lot.

And third are state and federal credits like on EVs. So, why do manufacturers offer these? If cars aren't moving and dealers start turning down Mazda's inventory, the manufacturers in the hall, they don't make money when us dealers sell cars to a customer.

They make money when they sell a car to us. The first is that it offsets slower months. It's way too expensive for a factory to scale production up and down, so incentives keep sales more steady.

Second, it pushes specific models that increase customer loyalty. For example, SUVs tend to have higher brand loyalty than sedans or sports cars. Third, it's just a pricing tool to stay competitive without permanently changing the car's MSRP.

Fourth, and finally, it just flushes out older inventory, like EVs, where buyer interest has dropped drastically lower than predicted values for the year. Want to know the best times of the year to stack these incentives? Subscribe.

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Recording audio when at a dealership be like.

And this have been on the lot for more than 200 days, so we're willing to make a deal and get these off the lot.

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