Allow Us to Explain Car Rebates: What They Are and How They Work

Allow Us to Explain Car Rebates: What They Are and How They Work

When you're shopping for a vehicle, you want to get the best deal. Buying a car, truck, or SUV is a significant investment that usually runs into tens of thousands of dollars. Finding incentives to lower the price and decrease your monthly payments can benefit you financially in the long haul.

You've probably seen car ads on TV with time-sensitive promotions that offer cash-back or bonus cash. These manufacturer rebates usually knock off a healthy portion of the purchase price – hundreds or even thousands of dollars – and may seem like a good idea.

While rebates are an excellent way to save money on a new car, buying a used car can conserve even more of your hard-earned dollars. Whether you're after a car, truck, or SUV, Shift has a wide selection of vehicles on its easy-to-use website, all thoroughly inspected and with free vehicle history reports. When you choose Shift, it's a good deal all around.

So, how do car manufacturer rebates work? What about dealer rebates? Here's some more information on the subject so you can make the best decision when buying a car.

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What is a rebate on a car?

A rebate is a financial incentive offered by a manufacturer to bolster sales or brand loyalty. Advertisements usually mention cash, with terms like "bonus cash" or "cash-back." On the surface, rebates seem like an excellent way to save some money on your next vehicle. 

But what do they involve?

You can apply a rebate as a down payment or, in some states, to lower the sales price before tax. If you can reduce the sales price off the vehicle’s MSRP – or manufacturer's suggested retail price – you get the added benefit of saving on taxes and possibly thousands of dollars in the process. Another option is a rebate check mailed to you. 

Since rebates are promotions to increase sales – usually on a particular model – they're only available for short periods like several weeks to a few months. So you'll have to strike while the iron's hot if you see an advertisement for the make and model you want.

Other types of incentives

Why do car manufacturers offer dealer incentives? Automakers use several tactics to entice new car buyers, and rebates are only one of them. Also popular in the quest to lure customers is low annual percentage rate – or APR – car loan financing. Usually, a manufacturer advertises zero-percent interest rate car loans for a limited time, but with specific requirements, like using their in-house finance company.

A popular promotion involves a car manufacturer advertising cash rebates and low interest rates on auto loans. However, in most cases, you have to choose one or the other. Each has its specific benefit. If you want the money right away to help with your down payment, the rebate is the better choice. But if you're going to spread out your savings over time, you may prefer going with the financing incentive. 

Low financing rates are also subject to credit approval, so there's no guarantee you'll be able to take advantage of them. 

For the smart car shopper, Shift has fair, no-haggle prices on a variety of used cars. Shift determines its prices with powerful machine learning algorithms and tons of data. Shift also has in-house financing, so it's your one-stop shop when you're looking for a quality used car.

Rebate restrictions

On the surface, rebates are a helpful financial tool on your road to getting behind the wheel of a new vehicle, but sometimes they're restricted to specific groups of buyers. 

Automakers offer rebates to both active duty and previous members of the U.S. Armed Forces. Typically, these offers are good for two years after someone retires from the military.

But depending on the manufacturer, qualifications vary, so you'll want to read the fine print before applying. 

Another type of rebate is for new or recent college graduates. If you're graduating in the next six months or did so in the previous two years, there's probably a rebate out there for you. To qualify, you'll need to have attended college for two or four years, depending on your field of study or an accredited technical or vocational school. You'll have to provide information like your diploma, student ID, or transcripts. A further requirement may be supplying proof of a job offer or current employment.

Loyalty rebates are especially for repeat buyers of a particular manufacturer. 

Conquest rebates are available for owners of newer vehicles who are considering switching to a new brand. 

Rebates can also be limited to specific regions or localities. So if you notice a promotion for a rebate from a particular manufacturer, first check if you qualify because you don't want to spend time pursuing a discount that you can't receive. 

With Shift's expertise and experience selling used vehicles, you can rest assured your used car purchase will be good to go from the moment you take delivery. And beyond administrative tasks, Shift offers financing and best-in-industry extended service contracts, too.

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How to find rebates

When you've decided on the make and model you'd like to purchase, there are a few ways you can find the best rebates on your purchase. 

You may get lucky and see a TV ad with an excellent cash rebate. 

You can also read through your local newspaper and see what rebates local dealers are advertising. Sometimes these rebates will be on previous year's models to keep cars moving off the lot. 

The internet is another powerful tool in the search for the best rebates. You can take your time and sift through all current rebates using a search engine or going directly to a manufacturer's website. You'll also be able to read the fine print and know whether or not you qualify before buying. 

Speaking of the internet, you can buy any of Shift's used cars from the comfort of your home on their easy-to-use website. Not only that, Shift delivers your vehicle directly to you for a streamlined buying experience.

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Rebates, in summary

Finding ways to save on your new car purchase can save you thousands of dollars. Rebates are one of the best ways to take the hit off your bank account and get you on the road for less.

Though rebates are a great way to save money on your new car purchase, there are a few things to keep in mind. Don't forget certain rebates apply to limited groups of people and, in some cases, specific localities. 

Visiting a manufacturer's website and reading the fine print is an excellent way to know just what you're getting into before you sign the papers. 

Wouldn't it be easier to purchase a vehicle without the hassle of searching for rebates and incentives? With Shift, you get a smooth used car buying experience without the hassle. Shift's website has a large selection of fully inspected cars located across the country that are ready to go. For extra reassurance, any vehicle you buy from Shift has a seven-day refund policy. In case you aren't fully satisfied with your purchase, you're able to return it with no questions asked. These are just some ways Shift makes it easy to buy a car regardless of its location.

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Author
Shift Editorial Team