New Car Rebates, Cash Back and Finance Incentives Explained

Rebates are financial incentives offered by automakers in an effort to drum up sales or boost brand loyalty. These discounts could be a great way to potentially save thousands on a vehicle purchase. Among these would be eliminating the down payment or having the dealer cover the first installment. If you are a repeat customer, see if there are any loyalty rebates. If you are leasing, bargain for additional yearly mileage or eliminate any lease disposition fees from the contract. An auto rebate could save you the most money on your car overall, depending on how much the rebate covers.

In some cases, you may be able to qualify for what is the turbotax phone number a rebate plus another incentive such as a reduced annual percentage rate, or APR, which could save you even more. Your lease amount is determined by subtracting residual value from the initial car price, and a smaller lease amount equals lower payments. This practice isn’t necessarily a negative, unless you decide to buy your car at the end of the lease. Automakers typically place incentives on older models or slow-sellers. Included on the list are cash-back offers, special interest rates, discounts, and lease deals. Beyond these conventional offers, there are also other non-cash inducements that can work in your favor.

Over the course of your 60-month loan term, you’ll end up paying $4,559 in interest for a total of $33,059 paid for the car. Rebates on cars originate from automakers — not dealerships — and are passed on to buyers through new-car dealerships. Rebates may also be referred to as a purchase allowance, cash back or bonus cash. Some auto dealers and manufacturers also offer incentives for specific groups of people. For example, if you have a certain car brand and want to buy or lease another one from the same manufacturer, you understand payroll tax wage bases and limits may be eligible for loyalty incentives.

Usually you can choose one or the other, but it never hurts to ask if they can be combined. If not, use an auto loan calculator to run each scenario and see which will save you the most money in the long run. Also, consider whether taking a cash rebate at the dealer and financing elsewhere could save you even more.

Used Car Rebates

1. When you’re looking at a car, dealers will probably let you know about the rebate up front.
2. Instead of wasting time visiting each manufacturer’s website, you can find customer rebates and new car dealer incentive information at Edmunds.
3. Usually you can choose one or the other, but it never hurts to ask if they can be combined.
4. It’s also worth noting that you’ll usually need strong credit to qualify for a promotional APR.
5. Automakers often subsidize leases through their captive financing companies in order to create attractive low monthly payments.

You can sort your search results by manufacturer or vehicle type to find the best rebate or financing deal. In many cases, you may be able to save up to $2,000 off the cost of some SUVs, up to $500 on many trucks, and between $500 to $1,000 on sedans. The automaker may require a balloon payment, which is a larger one-time payment at the end of the lease. If your budget won’t allow you to make this payment, you may damage your credit score and face other repercussions. Although lease incentives are perks, there are two main potential drawbacks to signing off on a hefty cash rebate. Rebate programs constantly change as vehicle manufacturers jockey for market share.

Consider car make and model

Also, check out Kelley Blue Book’s Ten Best Car Deals of the Month when starting your search. But since rebates are offered by manufacturers, you will need to go to a dealership that works directly with the manufacturer to qualify. You may also need to select a certain trim, usually one of the higher-end options, in order to get a rebate.

Factory-to-dealer incentives are paid directly to the dealer once the vehicle is sold. Usually, these types of incentives are paid monthly or even quarterly. When it comes down to selling a car, most dealers will negotiate or even give up a factory-to-dealer incentive to keep you from buying a new vehicle from their competition. A dealer may take a $2,000 net loss to sell that 45th Camaro to gain $22,500 in bonus money from the manufacturer. Depending on the program, car rebates may be used as a cash discount or applied toward the down payment.

Depending on the automaker’s rebate program, buyers can receive the money in the form of a lump sum or use it as all or part of a down payment. If multiple vehicles offer multiple incentives, calculate which combination of incentives saves the most money long-term. Don’t focus solely on the monthly payments over the total cost to finance. The same holds true if you ignore how much the vehicle will be worth over time. Automakers often subsidize leases through their captive financing companies in order to create attractive low monthly payments.

Auto rebate vs. low-interest financing

Before you head into the dealership, understand what discounts and incentives are available to you. It’s also good to know what a good price for the car you’re looking at truly is. And always negotiate the price before any rebates or incentives are applied. Then, all you have to do is drive off the dealer lot in your new car with a smile on your face. If you know how consumer rebates and incentives work, you can also use that information to find the best deal.

We do not include the universe of companies or financial offers that may be available to you. I recently went through all the major car manufacturer websites to find the best cash rebate deals out there for 2024 and 2025 models. Manufacturers will make you pick an offer, low-interest financing, or customer cash rebate. You will want to look at your current needs to determine which route will benefit you financially. Customer rebates and factory incentives vary by manufacturer and type of vehicle. Popular or high-demand cars are less likely to have any rebate or incentive.

These offers will include legal advertising language like “with approved credit” (WAC) in the fine print and high down payments or short financial terms. Low-interest financing is advertised with a low annual percentage rate (APR), and down payments are often based on top credit tier consumers. These types of incentives are used to push the sale of specific vehicles or older model vehicles that are phasing out. Manufacturers use dealer-cash-back incentives during model year changes towards the end of the year.

Both a cash rebate and 0 percent financing can help you save money on a car purchase. A cash rebate is money given back to the car buyer in exchange for purchasing a vehicle, while 0 percent APR is no interest or fees for an auto loan. It’s often referred to as a “lease deal” for a specific monthly payment. Automakers often offer low or 0% APR incentives along with — or in place of — cash rebates. While a reduced interest rate isn’t the same as a rebate, it can still save you money in interest if you plan to finance the vehicle. One type of vehicle may offer more than one type of incentive — for example both a low interest rate and cash rebate.

Making the most of auto incentives

So use my free service to Check Discount Car Prices to get the best prices that include current manufacturer offers and incentives. Instead of wasting time visiting each manufacturer’s website, you can find customer rebates and new car dealer incentive information at Edmunds. The information provided is the most current and up-to-date information from the manufacturers.

If you’re planning to purchase or lease an electric vehicle, there are numerous incentives beyond those offered by auto manufacturers. The most popular is the federal EV tax credit, which does have eligibility restrictions. While new car rebates and incentives are great, you still need to be an educated consumer.

On very few occasions, such as if the manufacturer is trying to move a certain vehicle, they may offer a combined offer. The most common programs are provided to consumers directly from the manufacturer. Depending on the vehicle, there may be more than one program available.