How Much Do Car Rebates Increase Within a Eyar

Justin Sullivan Getty Images

When you purchase a new car or truck, a vehicle rebate is a discount provided by the manufacturer to qualifying buyers. According to Angie's List, manufacturers often offer these incentives to encourage sales of a particular make or model. For example, rebate offers typically depend on the supply and demand of a specific vehicle. The car dealer may call a rebate by another moniker, such as holiday cash, consumer credit, bonus cash, or a purchase allowance. Looking for more info on "what is a vehicle rebate?" Read on to learn more.

Understanding Car Manufacturer Rebates

Angie's List says that unlike a discount, which indicates a percentage off, rebates are typically expressed as a cash amount. Because rebates are offered at the manufacturer level rather than the dealer level, you can go to any dealer that sells that type of car to take advantage of a rebate offer. Conversely, dealer-level incentives are only available from that specific car dealership.

Depending on the car manufacturer, the specific vehicle, the season, and other factors, common car rebates are as little as $500 or as much as $5,000. Often, a specific rebate offer lasts less than 15 days before discontinuation. It could also receive an increase or decrease depending on the success of the promotion for the vehicle manufacturer.

Because the manufacturer no longer owns a used car, rebates are not available for preowned models. However, you may be able to find a dealer discount on a used car, which is different than a rebate. Rebates are most commonly offered by mass-market car manufacturers, such as Honda, Chevy, and Ford. Rebates from luxury brands like Mercedes, on the other hand, are relatively rare.

Usually, you apply the rebate as a down payment to the car you want to purchase. However, if you have cash saved for a down payment or plan to trade in a different vehicle, you can request a check from the manufacturer for the rebate amount.

In certain states, you can reduce the taxable price of the vehicle by the amount of the rebate. This decreases your required sales tax on the purchase, so make sure to review your state tax laws when running the numbers on a vehicle with a rebate offer.

Rebates vs. Financing Incentives

A rebate is just one type of car buyer incentive. An incentive is anything offered by the manufacturer or dealer that encourages customers to purchase a car by sweetening the pot, so to speak. Common types of incentives include rebates as well as delayed loan payment for the first few months, lifetime warranties on the vehicle's power train, and free oil changes for the life of the vehicle.

In addition to cash rebates, a manufacturer may offer special financing for a new vehicle. A 0% APR for a certain loan is a common incentive. According to CarsDirect, the annual percentage rate (APR) is the interest rate you pay on the part of the vehicle cost that you finance with a bank or dealer loan.

Most dealers require that you select either special financial or a cash rebate, but not both offers. According to Autobytel, you should always at least ask the dealer if you can combine offers when purchasing a car with several different incentive possibilities. If you are required to choose, Edmunds recommends taking the rebate so you have the cash upfront, since the discount you'll receive with a low APR will be spread out over the life of the loan.

Qualifying for an Incentive

The factors that determine whether you qualify for a rebate or incentive depend on the manufacturer. For example, the manufacturer may offer a special low-interest rate on your auto loan if you finance through their in-house lender. To qualify, you must have a certain minimum credit score that indicates good to very good credit.

While some rebates require the buyer to be in a certain profession such as teaching or military service, that is not usually the case for vehicle rebates. Instead, the manufacturer offers these incentives as a sale on overstock vehicles and other car models with high supply.

Other Types of Rebates

In addition to the common cash rebate, Lending Tree notes that car buyers can also take advantage of other, less common rebate types.

• If you buy the same car brand you've already purchased in the past, ask the dealer if you can qualify for a loyalty rebate.
• If you are thinking about switching to a new brand after an issue with your tried and true manufacturer, ask the new manufacturer about a conquest rebate. This incentive is designed to encourage car buyers to switch to a less familiar brand and typically applies if you own a newer model vehicle from a competitor.
• Military rebates are a common incentive for families who have a household member who serves or previously served in the U.S. military. In most cases, these incentives are good for up to two years after the member's end of service date, but different manufacturers have different rules for qualification. For example, Kia extends this program to any service member who received an honorable discharge, no matter how long ago he or she served. To qualify for a rebate of this kind, the service member should bring his or her DD-214 or Leave and Earnings Statement to the dealership. You may also qualify with a bank statement that shows disability or military pension deposits. However, a military ID badge cannot be used since the dealership is legally prohibited from photocopying this form of ID.
• Some dealerships offer student rebates for college students who will graduate within six months or already graduated within the past two years. In most cases, you must have completed a program at a two-year or four-year college, graduate program, or accredited junior, technical, vocational, or trade school program. To qualify, you usually have to bring a copy of your diploma, transcripts, or student ID. You may also need to show that you have a job or a job offer that starts within 90 days of the purchase.
• Educator rebates are sometimes available for public school teachers.

  Information and research in this article verified by ASE-certified Master Technician Duane Sayaloune of YourMechanic.com . For any feedback or correction requests please contact us at research@caranddriver.com .

Sources:

https://www.angieslist.com/articles/how-do-new-car-rebates-and-incentives-work.htm

https://www.autobytel.com/car-financing/money-saving-tips/what-is-a-vehicle-rebate-100509/

https://www.lendingtree.com/auto/car-rebates/

https://www.edmunds.com/car-incentives/

https://www.carsdirect.com/car-buying/understanding-car-dealer-rebates-and-incentives

This content is created and maintained by a third party, and imported onto this page to help users provide their email addresses. You may be able to find more information about this and similar content at piano.io

How Much Do Car Rebates Increase Within a Eyar

Source: https://www.caranddriver.com/research/a31484034/what-is-a-vehicle-rebate/

Share this post