# A "factory bonus" when you buy a car?
**URL:** https://boards.straightdope.com/t/a-factory-bonus-when-you-buy-a-car/473849
**Category:** Factual Questions
**Created:** [November 21, 2008, 4:22pm UTC](https://boards.straightdope.com/t/a-factory-bonus-when-you-buy-a-car/473849 "2008-11-21T16:22:57Z")
**Posts on this page:** 9
**Page:** 1
### Author:  [@Sevastopol](https://boards.straightdope.com/u/Sevastopol)
#### Post date: [November 21, 2008, 4:22pm UTC](https://boards.straightdope.com/t/a-factory-bonus-when-you-buy-a-car/473849/1 "2008-11-21T16:22:57Z")
So, I’m looking at a new car and all the large advertisements mention a 'factory bonus". What does is all mean?
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### Author:  [@spingears](https://boards.straightdope.com/u/spingears)
#### Post date: [November 21, 2008, 4:45pm UTC](https://boards.straightdope.com/t/a-factory-bonus-when-you-buy-a-car/473849/2 "2008-11-21T16:45:34Z")
> [@Sevastopol](#):
>
> 'factory bonus".
The factory is not enforcing the “suggested manufacturer’s retail price.”
> [@](#):
>
> What does is all mean?
The factory and dealers have an excess of inventory and want to sell more cars ASAP to avoid the inevitable potential bankruptcy or going out of business.
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### Author:  [@Santo\_Rugger](https://boards.straightdope.com/u/Santo_Rugger)
#### Post date: [November 21, 2008, 8:08pm UTC](https://boards.straightdope.com/t/a-factory-bonus-when-you-buy-a-car/473849/3 "2008-11-21T20:08:36Z")
I thought it was simply a way to get you into a car without having a down payment up front. They’ve been around for way longer than the car companies have been (publicly) in trouble.
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### Author:  [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)
#### Post date: [November 21, 2008, 8:14pm UTC](https://boards.straightdope.com/t/a-factory-bonus-when-you-buy-a-car/473849/4 "2008-11-21T20:14:55Z")
> [@spingears](#):
>
> The factory is not enforcing the “suggested manufacturer’s retail price.”
Huh? They never enforce it. Almost nobody buys a car for MSRP.
A factory bonus is probably like a rebate, a discount or rebate that goes to the buyer paid by the factory rather than the dealer.
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### Author:  [@Rick](https://boards.straightdope.com/u/Rick)
#### Post date: [November 22, 2008, 5:46am UTC](https://boards.straightdope.com/t/a-factory-bonus-when-you-buy-a-car/473849/5 "2008-11-22T05:46:39Z")
In the industry a “cash bonus” or a “factory cash incentive” is referred to as stuffing money into the glove box.
What this means is you cut a deal with the dealer. After this is over the car company will give you $XXX dollars on top of that to get you to buy the car.
Example:
MSRP of a 2008 Rolls Canhardly\* = 25,000
Negotiated price from dealer = 22,500
Factory cash = 1,000
Net price 21,500
Another wrinkle $X factory cash or 0% (1%, 2%) financing. Here you have to bit of math to determine which is best for you.
\*rolls down one hill, can hardly make it up the next
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### Author:  [@Santo\_Rugger](https://boards.straightdope.com/u/Santo_Rugger)
#### Post date: [November 22, 2008, 8:17am UTC](https://boards.straightdope.com/t/a-factory-bonus-when-you-buy-a-car/473849/6 "2008-11-22T08:17:20Z")
> [@Rick](#):
>
> After this is over the car company will give you $XXX dollars on top of that to get you to buy the car.
But you don’t actually get that money in cash, right? It’s applied to the down payment, isn’t it?
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### Author:  [@Bootis](https://boards.straightdope.com/u/Bootis)
#### Post date: [November 22, 2008, 9:25am UTC](https://boards.straightdope.com/t/a-factory-bonus-when-you-buy-a-car/473849/7 "2008-11-22T09:25:50Z")
> [@Santo\_Rugger](#):
>
> But you don’t actually get that money in cash, right? It’s applied to the down payment, isn’t it?
Well, if the bonus is applied to the down payment, and the down payment is $2000, and the cash bonus is $1000, you could just pay with a $5000 bill, and you’d get $4000 in change.you could then assume that $3000 is change from the payment you paid in full, and the other $1000 is money in cash for you
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### Author:  [@Rick](https://boards.straightdope.com/u/Rick)
#### Post date: [November 22, 2008, 2:08pm UTC](https://boards.straightdope.com/t/a-factory-bonus-when-you-buy-a-car/473849/8 "2008-11-22T14:08:31Z")
> [@Santo\_Rugger](#):
>
> But you don’t actually get that money in cash, right? It’s applied to the down payment, isn’t it?
You can get a check, or use it to lower your down payment. I think most people use it to lower their down.
ETA: It will take time if you choose to get a check since it is cut by the car maker.
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### Author:  [@Santo\_Rugger](https://boards.straightdope.com/u/Santo_Rugger)
#### Post date: [November 22, 2008, 5:21pm UTC](https://boards.straightdope.com/t/a-factory-bonus-when-you-buy-a-car/473849/9 "2008-11-22T17:21:04Z")
> [@Rick](#):
>
> You can get a check, or use it to lower your down payment. I think most people use it to lower their down.
> ETA: It will take time if you choose to get a check since it is cut by the car maker.
Cool, I didn’t realize you could get an actual check out of the deal. Seems like it’d be kind of silly, since you’d be effectively making your loan bigger for no reason.