Hi,

Does anyone know how much Mitsubishi USA is offering to cash buyers who opt out of the promotional APR rates?

Not to be confused with a factory to retailer cashback. Thanks.

 

I haven't heard of any cashback incentive beyond the $500 loyalty rebate. Keep in mind that you can always buy a car for less if you forego the 0% interest rate. Mitsubishi will sell the loan as soon as they can and so they won't be servicing it. For example, you could buy a new X for, say $30,000 at 0%. Or, with agressive negotiation, you could buy it for $27,000 if you were to pay cash or line up your own financing. If they sell it to you for $30K at 0% they're going to sell that loan for, say, $27K. Whoever buys the loan will get to collect the $3K in interest over the next 5 years. If you pay cash or finance it independently and pay $27K, Mitsubishi will still make $27K. Remember that will only sell a car that cheap if they really want to get rid of it and aren't that interested in making a profit. Cars that languish on the lot for months actually cost the dealer money. They're paying interest on every new vehicle that they have. That's what floorplan financing is all about. Dealers finance their inventory with an independent bank. As soon as a car sells, they pay the bank and hopefully pocket some extra. An Evo X that has been sitting there for 6 months is probably not going to generate much (if any) profit at the time of sale since 6 months of interest has been piling up.

 

The dealer doesn't care if you pay cash or loan. They get their money either way. Mitsubishi, however, might want the cash but that doesn't seem to trickle down the chain.

 

There's no difference to between paying cash and financing through an independent company. They will get $X either way. However, there is a difference if you get 0% interest. They will not be able to sell you the car for the same price as the other two options if you go that route.

 

Mitsubishi USA does offer cashback for customers who forfeit the special APR.
Up here in Canada it is $1500 for November.
I want to know what they're paying in the USA.

0% or whatever subvented rate costs Mitsubishi X amount of money, therefore they always provide an alternate cashback.

Anybody know what the amount is for November?

 

In the US they do not offer cash back...dealers pricing doesn't seem to change at all based on the option chosen.

Let's say you buy your evo for 30k, and finance it all at 0%/60mo. Let's say you then throw that money in a decent interest bearing account (3%) and use that to pay your monthly bills. At 60 months, you will have $2,525.15 in that account. If you took $1500 cash back and paid cash, it would be worth $1,742.43 if put into the same account. In order for the rebate to be equal it would need to be $2,174.

Let's say you get smart and put that money into something that earns around 5% like some of the nicer CDs out right now... then you get $4,887.74 in that account vs $2,091.97 in the rebate case. For the rebate to have the same future value of the 0% financing, you would need a $3505 rebate.

Hope that helps/makes sense.

 

Yeah that's a helpful scenario, I was crunching all the numbers as well and agree with you. Usually the cashback does not equate the real money value of the ca since the financial has very cheap cost of funds. Better off using the 0% on 36 months (that's what is being offered up here in Canada), and using the cash for investment or a rainy day.

Fact of the matter is that dealers are receiving a cashback but aren't transferring the savings to buyers, since it is not public information. Check with your dealers monthly sheets and it is stated APR or a specific amount of cashback. Anyways, here in Canada all manufacturers function this way.

Dealers will tend to prefer financing at special APR since they receive a minor kickback for the funded deal, and it is easier for the business manager to sell his finance and insurance products on a monthly payment.

So I still think there's a cashback amount being offered... maybe a US dealer can chime in...?

 

As a current market shopper -- at least in the US dealers are not receiving additional incentives for cash deals vs financing. Or at least they are indifferent to those costs, even when dealing with prices well below invoice (ie they are already sacrificing holdback/other backend money to make the sale).

If you give me your sale price and expected bank return rate I can calculate the future value of the loan vs a rebate for you.

 

Thanks bud that's nice of you. I should be ok now though since you confirmed that no cash incentive is being offered. I was still crunching the numbers on a US vs. canadian purchase.

I'll be doing 0% 36 mths up here, it's the best deal.
Thanks again.