How does cash rebates work?

[Veximan]

sorry for asking a noob qns...but how does it work?u buy the car at the advertised price, then they give u back the stated amount of $$$ as rebates?

[Toyo]

yes. but it usually comes with terms and conditions such as taking a high loan amt with higher interest

[Santarene]

depends on how much u're going to loan from them. Usually the more u loan for a longer period of time, the more rebate u'll receive in cash.

[Ultramega]

don't be taken in by such gimmicks.

[Toyo]

its good for those who cant fork out much deposit. but then they will need to take a high loan

[Cheekg98]

cash rebates is actually yr money

[Ultramega]

can't pay deposit or downpayment just take full loan. that's the real solution.

 

rebates don't solve the problem at all.

[Toyo]

Rebates makes the final car price more attractive

[Ultramega]

i disagree cos interest is higher.

[Turbonetics]

i don't think cash rebate have to take high loan to be entitle for it.

but for cash rebate,your interest rate will be different(higher).

the more amount you loan,the higher rebate you will get.

the highest you can get is about 30% of your total loan interest.

but you can choose not to take so much but your interest rate will still be higher than normal.

[Toyo]

i enquiry before.

higher by 0.7% (2.8% vs 3.5%). rebate almost 4k, mthly installment difference by $20 taking a 7 years (35k) loan

[Turbonetics]

some bank are as high as 4%.

[Fondue]

sorry for asking a noob qns...but how does it work?u buy the car at the advertised price, then they give u back the stated amount of $$$ as rebates?

 

Its a money making tactic for dealers to entice buyers to take higher loan.

 

Suppose car cost 50k. Dealer can sell at (1) 50k or, at (2) 60k with 10k rebate. Both comes up to the same selling price.

 

But suppose you are taking full loan say at 3% for 10yrs.

for (1) total interest paid is 50k*3%*10yrs = 15k.

for (2) total interest paid is 60k*3%*10yrs = 18k.

 

So by buying at 60k with 10k rebate, buyers pay and additional 3k in interest.

But if you are capable of making more than the 3k from the 10k rebate thru investment, then by all means, get the rebate.

[Toyo]

4%??? so high

better check the terms and conditions carefully

[Wilb]

Cash Rebate is actually not bad considered you are going to drive your car for the full ten years.

 

If you decide to change car after 2-3 years, a lot of charges and penalty because u ate the cash rebate.

 

Rule 78.

[Toyo]

tat's one of the terms and conditions

[Veximan]

Let's say the car price listed is 40k, i go to the car SE, and i said i want the cash rebate and i want a 10 year loan. I am given 5k, so that i can use this 5 k to pay for my insurance, etc etc...am i right to say so?but of course, the interest rate will be higher.

[Toyo]

not very sure. i thk they will deduct the 5K from the purchased price