How does cash rebate work? (F150, vehicle, 2014, credit)
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How does cash rebate work?
For example with Ford.
Let's say there is a car available for $20k, with $1k factory rebate.
Do I make a payment for $19k when picking up the car, or I make $20k payment and receive a check for $1000? Do I receive the check right away, or later in the mail?
Can this rebate be tied to taking financing? One car sales guy told me I cannot take the rebate if I pay in full with cash, only if I do financing. Did he lie?
There are many different kinds of rebates and incentives.
If this is a normal $1,000 manufactures rebate - the $1,000 is taken off the final negotiated price. But salespeople may play all sorts of games with rebates.
When I bought a new car, my salesman, a good friend and fellow musician of mine, told me there was a $2,000 rebate incentive going on if I financed through GM. I wasn't going to finance as I had a trade in and had the cash for the difference. He told me to finance the balance anyway, get the rebate, make a couple of payments and pay the loan off, which I did. The rebate was deducted from the price I paid for the car. Got the rebate and only paid interest for a couple of months. I came out ahead on that one.
If I am not mistaken, all rebates are deducted from the price of the vehicle before the taxes are calculated. So I also saved 9% sales tax on the $2.000 rebate.
Can this rebate be tied to taking financing? One car sales guy told me I cannot take the rebate if I pay in full with cash, only if I do financing. Did he lie?
And to answer your second question, since everyone seems to have missed it.
No, he did not lie. Most car companies do this. Here's how it works.
Jeep Cherokee is $34,000. Dealer tells me I can get $4,000 off IF I take dealer financing @ 3.9%.
-OR- they can give me 0% and $750 New Year Bonus Cash (or whatever incentive they offer now).
Not making this up. This was an actual offer to me.
Here's the thing: they offer you a huge discount, but sign you up for a loan where you are going to pay... wait for it.... $3,000 in interest over the life of it IF you make minimum payments. So you're not REALLY saving that money unless you make much larger payments.
I know what you're thinking next... or should be: "Couldn't I take their loan with the big discount, make a payment or 2 and pay it off?"
Yes. Yes you can. Just make sure there is no early pay off penalty.
A clarification about sales tax. Not all states apply the sales tax to the rebated price. My state of Maryland is one that does not. I bought a 2014 F150 that had a MSRP of around $34K but had a total of $9K worth of various rebates for my price of $25K. The sales tax was calculated on $34K for that one. That's been the case for every vehicle we've bought here that had rebates.
How does cash rebate work?
For example with Ford.
Let's say there is a car available for $20k, with $1k factory rebate.
Do I make a payment for $19k when picking up the car, or I make $20k payment and receive a check for $1000? Do I receive the check right away, or later in the mail?
When I worked at a Toyota dealer, they could send you a rebate in the mail (I think you had to mail something off to claim it) but 99% of the time there was a form you would sign and it would be lopped off the purchase price and sent from the manufacturer to the dealer. I remember maybe one person that took it in the form of a check sent to him.
Quote:
Originally Posted by buenos
Can this rebate be tied to taking financing? One car sales guy told me I cannot take the rebate if I pay in full with cash, only if I do financing. Did he lie?
It can be. It isn't always. Sometimes its an "Either/or" where you take 0% financing, and I've seen it "$1000 rebate when you finance with Ford Financial Services" advertised too.
A clarification about sales tax. Not all states apply the sales tax to the rebated price. My state of Maryland is one that does not. I bought a 2014 F150 that had a MSRP of around $34K but had a total of $9K worth of various rebates for my price of $25K. The sales tax was calculated on $34K for that one. That's been the case for every vehicle we've bought here that had rebates.
Yes to this. Last I checked a little more than half of the states treat manufacturer rebates as cash back off of the sales price, so you pay sales tax on the rebate amount if it is a manufacturer rebate and not a selling discount. The other 20 or so you did not pay sales tax on the rebate amount, so it is definitely "vary by state" thing.
Why does Ford insist for its customers to take financing?
I mean that the rebate is tied to taking financing.
That they would take the hit of a no-sale, while trying to force people to buy not with cash but with financing.
The ford website says the rebate is a prepaid debit card, but it does not say whether it can be spent on or cashed out...
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