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Cash allowance incentives can be used by the dealership to erase some or all of the negative equity that the car buyer has, allowing the loan to be approved. The amount of the cash incentive generally depends on the type of vehicle being promoted.

In most cases, the incentive will be smaller for less expensive vehicles and significantly higher for high end vehicle that carry a bigger sticker price. Vehicles that have more options and a higher profit margin all online cash loans into the sticker price will generally have a higher incentive. This is because the manufacturer and the dealer can generally retain a greater profit level with these vehicles than with those that have fewer options and a lower sticker price.

References (1) About the Author. Jared Lewis is a professor of history, philosophy and the humanities. He has taught various courses in these fields since 2001. A former licensed financial adviser, he now works as a writer and has published numerous articles on education and business.

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