We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is a Dealer Incentive?

Kristie Lorette
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A dealer incentive is a perk of some kind that the manufacturer of the vehicle gives to the dealer for taking on vehicle inventory to stock the dealer’s lot. A dealer incentive can present itself in a couple of different forms including selling the vehicles to dealers at a lower cost or rebates on the vehicles the dealer sells.

One of the most popular dealer incentive is when the manufacturer sells the dealer the vehicles for a price that is less expensive than the true cost to the dealer. Since the dealer pays less money to acquire the vehicle from the manufacturer, the dealer has the opportunity to make more of a profit when they sell the vehicle.

In some cases, the manufacturer only offers a dealer incentive if and when specific sales goals are met. In this case, the manufacturer sells the dealer the vehicles at the normal cost. If and when the dealer meets the sales goal that the manufacturer has set, then they will rebate the money back to the dealer as part of the dealer incentive.

Some of the dealer incentive packages are also tiered. This means that the sales goals for the rebates that are set by the manufacturer have different levels. As the dealer reaches the selling point of these different levels, the rebates from the manufacturer increase at each tier as well. It is a manufacturer’s way of building competition between dealers and to sell vehicles that may be slow-movers on a normal basis.

While a dealer incentive is a treat for the dealer, it can be a motivating factor for the dealer to help a customer as well. For example, if the dealer incentive is based on the amount of vehicles that the dealer sells, they may work out a lower price on the vehicle to sell more of those vehicles rather than lose the sales all together. Typically, the dealer will only go as low on the price as they can to sell the car and at least have the dealer incentive make up for what they lost on the individual sale.

In addition to offering dealer incentives to motivate dealers to sell vehicles that are not selling as well as other models, dealer incentives are also a tactic for acquiring dealer customers. For example, a manufacturer may provide an incentive for the dealer to take on additional inventory that the dealer would not normally take on to help the manufacturer move the vehicles and provide an incentive to the dealers for keeping these additional vehicles in inventory.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Kristie Lorette
By Kristie Lorette , Former Writer
Kristie Lorette, a storyteller, copywriter, and content creator, helps businesses connect with their ideal audiences through compelling narratives. With an advanced degree and extensive experience, she crafts engaging long and short-form content that drives results across various platforms. Her ability to understand and connect with target audiences makes her a valuable asset to any content creation team.

Discussion Comments

Kristie Lorette

Kristie Lorette

Former Writer

Kristie Lorette, a storyteller, copywriter, and content creator, helps businesses connect with their ideal audiences through compelling narratives. With an advanced degree and extensive experience, she crafts engaging long and short-form content that drives results across various platforms. Her ability to understand and connect with target audiences makes her a valuable asset to any content creation team.
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.