Mastering Rebates, Incentives Becomes a Top New Car Priority

Franchise dealers are now facing a significant challenge as the 25 percent tariffs on import vehicles and parts have taken effect.

Cox Automotive estimates that the tariffs, which affect import vehicles making up 50 percent of the new vehicle market, have raised the average cost of new vehicles by several thousand dollars, depending on the segment. With the average new vehicle price nearing $50,000, many buyers are finding new vehicles unaffordable.

Cox Automotive senior economist Charlie Chesbrough notes, "Dealers and OEMs are pulling back on incentives as the rush to sell existing inventory declines. The value of an unsold vehicle on a dealer’s lot has increased since its replacement cost is now much higher. Future supply availability may also be vulnerable, shifting the motivation to sell away from the buyer’s favor."

A critical question now is how OEMs will address the impact of tariffs through rebates and incentives. While manufacturer incentives at the end of 2024 helped boost new vehicle sales, it remains unclear how much incentive-related support dealers will receive as new vehicle costs continue to climb.

This blog explores best practices for mastering rebates and incentives, helping dealers accurately capture and apply them to the right vehicles when available.

Incentive Trends in the New Car Market

In February 2025, the average blended incentive amount is $4,830, which is down $550 since December but still $150 higher than the beginning of Q4 2024. Incentives play a crucial role in the automotive market, helping dealers attract customers and close sales. The types of incentives include VIN-specific incentives, manufacturer-financing cash, and APR incentives. These incentives help dealers target slow-moving vehicles with tailored rebates, ensuring each vehicle receives the maximum allowable incentives.

As 2025 unfolds, analysts expect the mixed nature of rebates and incentives will continue. vAuto’s Conquest helps dealers efficiently apply and promote available incentives as they list new vehicles for sale online:

•    VIN-Specific Incentives: These incentives typically apply to slower-moving vehicles. With Conquest, dealers can efficiently apply and “stack” VIN-specific rebates and incentives on the right vehicles to ensure each vehicle receives the maximum allowable. 
•    Manufacturer-Financing Cash and APR Incentives: Dealers can now automatically apply these incentives to their advertised prices, simplifying the pricing process and making it more attractive for customers looking for financing options.
•    Auto-Apply Maximum Allowable Incentives: This new configuration setting in Conquest eliminates the risk of either incorrectly applying an incentive to the wrong vehicle or missing an available incentive that results in a less-competitive offering for potential buyers.

Benefits of Rebates, Incentive Management Mastery

By effectively managing rebates and incentives, dealers can enjoy several benefits:

•    Enhanced Customer Experience: Prominently featuring each vehicle's discounts and promotions in the VDP photo carousel helps attract more customers and close more sales.

•    Increased Efficiency: Automated rebate application and real-time pricing optimization save time and allow dealers to focus on selling cars.

Success Story: Chris Morris and Hello Auto Group
Chris Morris, VP of Operations at California-based Hello Auto Group, relies on vAuto’s Conquest solution to manage his new vehicle inventory efficiently and make market-informed decisions. With Conquest, Morris knows how his dealership days supply compares to the market, and where his market share for specific models, trimlines and segments may be ahead of or behind the competition.

By analyzing extensive competitor information and accessing data, Chris improves his dealership’s new vehicle sales performance, profit, and turn.

Conclusion

Effective management of rebates and incentives is crucial for dealers looking to offer competitive deals and maximize their sales potential. By simplifying the application of these financial benefits and providing real-time data, vAuto's Conquest supports dealers in making informed decisions and enhancing the customer experience.

For more information on Conquest and our latest updates, visit here.