One of the best ways to get the best prices on new cars is to take advantage of monthly sales incentives such as rebates and bonus discounts sponsored by car manufacturers through dealers (see Best Car Deals for details).

However, the catch is that those incentives are only good on selected vehicle models and styles, and only for a limited time.  If the particular brand, model, and style that you want is not one of those with incentives offers this month, you are back to square one — negotiating for deals the old fashion way.

A new company has come along that changes all that, and may change how we buy cars in the future.

TrueCar answers the question, “What should I pay for my car?” Even if you are a shrewd negotiator, you have to know your target price. You also would benefit by knowing what other people are paying for the same car, same model, same style that you want. With that knowledge, you will know the price you should be aiming at.

Car companies frequently offer special monthly lease deals but Honda does it a little better. They offer their deals in two different flavors — with a down payment and without — which is unique.

Special lease offers from car companies typiclly require a down payment (cap cost reduction), first month’s payment, and possibly a security deposit. It’s only a good deal if you adhere to the rules and make the down payment as required. If you choose not to make a down payment, it’s a different deal and one that is not so good anymore. Honda’s deals are different.

Honda offers special lease deals nearly every month on at least one style with each of it’s model lines. They can do this by reducing the sale price, reducing the finance rate (lease money factor), and boosting the lease-end residual value. All of these things, in combination, make for an attractively low monthly payment. In fact, these deals are much better than a customer could negotiate for himself. The “catch” is that the deals only apply to certain styles and not to all.

Therefore, customers have to decide if they want the style being promoted. To choose another model or style would require a normal, non-promotional lease at normal terms. However, Hondas are one of the most leaseable brands out there — due to high residual (resale) values — and are nearly always good deals when compared to other brands.

Car manufacturers use incentives to make their new cars more affordable during limited-time promotions.

The most common incentive is a direct to customer rebate, although there can also be other incentives such as low-interest loans, 0% APR loans, special car lease deals, and “hidden” factory-to-dealer cash.

Incentive programs vary from month to month depending on which models and styles manufacturers feel need sales “help”. Slow selling models or last-year’s leftover vehicles typically get the best rebates and incentives. However, it not ususual for a brand new model to get good rebates or other incentives.

A rebate is a credit that you receive when you buy a new car during the promotional period. It shows up on your paperwork the same as a down payment, although the money comes from the manufacturer’s pocket, not the dealer’s, and is like a gift to you that reduces the amount you pay for your car.

However, a rebate is not a price discount. It doesn’t change the selling price of the car (although it changes what you pay).  Rebates and discounts are NOT the same, although both reduce the amount you pay for a car. Let’s explain.

As this is being written, this year, 2011, has become the best time to buy a new car in years. And 2012 looks to be even better.

In normal years, we would tell you that the best time to buy a car is when sales are slow at the end of the month, end or the year, or during vacation season. We would tell you that you might still have to negotiate your prices because dealers aren’t just going to give you a good deal because they like you.

BUT……..things are much different now. Sales have been slow for over a year and are still slow right now. As a result, we are now seeing some of the biggest and best car incentives on new cars that we’ve seen in years. Nearly every car manufacturer is now offering a combination of large factory-to-customer rebates, low-interest loan deals, 0% APR loans (even on long 72 month loans), special lease deals, free maintenance, and “secret” factory-to-dealer rebates that dealers usually give to customers.

Why has 2011 become such a good time to buy a car?