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You can take the rebate as cash if you wish, in which case the automobile manufacturer will mail you a check. But most folks simply apply the rebate to their down payment and never see the cash. For example, if you applied $1,000 of your own cash plus a $500 rebate to your down payment, your down payment (in most states) would appear in the paperwork as $1,500. In fact, that's the best option if you plan on financing - and particularly if you don't have much money to put down.
I read too many stories about the games played by the Finance Depts at car dealerships..."pretending" to lower your monthly payments on the front end while extending the months on your loan on the back end...and my personal favorite, letting you sign for one rate, only to call you back after you've had the car for two weeks talking about "the financing for the great rate you had fell through, you are going to have to come back in and get this MUCH HIGHER rate"...all true stories by the way. So getting my own financing was seen as the best way to avoid all the scams/games played.
People with bad credit get new cars easily… yet a higher rate.. im an example.. huge medical bills (open heart)… score at 500 bought a Fiat 500L Trekking…$25,095 msrp…$4500 rebate…18000. on a trade that I owed $7500… Loan just over $10k.. interest rate 7%…
Your scenario with a huge portion of the price being put down is in no way an example of people with bad credit easily buying a new car. It's actually a rare exception.
If you take the cash, wouldn't they just send you a 1099?
Rebates are taxable as in sales tax. State laws do vary but as a general thing they are taxable. If you have a sales tax it's taken off after taxes are figured.
25,000 - 500 rebate. You are taxed on the 25,000 not the 24,500 you paid. They aren't taxable as income.
Where are you negotiating car price and rate at the same time? Seems rather odd that I've always had to two separated with the car deal coming together first and then moving to finance if it's needed at all
All of these places want to sell you on the monthly payment (in my experiences) anymore.
At least that's what I've seen the last 4 cars I've either bought or helped buy in the last 2 years or so.
Actually, one car I flat out asked the guy where he could work with me more since they have measures they are held against.
1. Car price
2. trade-in value
3. Financing
If you have a guy getting incentives or pressure from his boss or whatever on one of the three, you can cut to brass tacks and essentially help them *win* by giving them something, while they hand it back to you on another.
In short, I play their game, I let them hammer me on the financing and it has worked very very well.
P.S. Also ask for throw-ins like service packages, car washes, extended warranty....whatever you can get.
Here's something that I learned recently. Most dealerships make money from banks.
I bought a used car and was offered a certain finance rate from a certain bank. I said I'll have to think about it and shop around. As soon as I said this, the finance guy said "let me see what I can do" and got the interest rate lowered by 1%.
A friend that works at car dealerships told me that car dealers get payment from banks when using them. This is why dealers check certain banks but not others (even though there are like 10 local banks in my area).
My guess is that if you are offered 5% interest on a used car, the dealer probably gets a percent or two of that interest. Which is why they like you to use their financing.
On another note, this is why I hate car dealers. They are all sleazy. I'd much rather buy the car straight from the manufacturer (like Tesla) and just have a no haggle price.
I'm not sure why everyone feels that the dealership is out to get them. They are there to make a profit. It's not a charity.
I went in with no prearranged financing on a Saturday afternoon. Walked out a few hours later with a brand new 2015 van. I paid 1500 under invoice and qualified for 0% or .9% financing depending on the term.
Generally, when I hear people complain about dealers they're being unreasonable or have finance issues and expect the dealer to bend over backwards as if they're special.
All of these places want to sell you on the monthly payment (in my experiences) anymore.
At least that's what I've seen the last 4 cars I've either bought or helped buy in the last 2 years or so.
Actually, one car I flat out asked the guy where he could work with me more since they have measures they are held against.
1. Car price
2. trade-in value
3. Financing
If you have a guy getting incentives or pressure from his boss or whatever on one of the three, you can cut to brass tacks and essentially help them *win* by giving them something, while they hand it back to you on another.
In short, I play their game, I let them hammer me on the financing and it has worked very very well.
P.S. Also ask for throw-ins like service packages, car washes, extended warranty....whatever you can get.
If you are talking about payments or financing with the sales guy it has nothing to do with actual possible payments or financing
Here's something that I learned recently. Most dealerships make money from banks.
I bought a used car and was offered a certain finance rate from a certain bank. I said I'll have to think about it and shop around. As soon as I said this, the finance guy said "let me see what I can do" and got the interest rate lowered by 1%.
A friend that works at car dealerships told me that car dealers get payment from banks when using them. This is why dealers check certain banks but not others (even though there are like 10 local banks in my area).
My guess is that if you are offered 5% interest on a used car, the dealer probably gets a percent or two of that interest. Which is why they like you to use their financing.
On another note, this is why I hate car dealers. They are all sleazy. I'd much rather buy the car straight from the manufacturer (like Tesla) and just have a no haggle price.
If they can beat the rate you have, whats the issue? If you are financing why do you care who you issue your monthly payment to? I see no harm in seeing if they can give you a better rate. In the end it can only help you. Any legitimate bank will let you buy a car any where. If you are using a financing company that requires you to go to specific dealers, that should be a huge red flag.
No, it should not be. The financing company wants to ensure shady dealers do not sell cars to the loanee that have problems that would reduce their sales value in case of a repo. Capital One pretty much includes all new car dealers and national used car companies in their approval list. Uncle Buddy's probably ain't approved.
I always get pre-approved by Capital One and walk in with a check. If the auto dealer can beat their rate I have the option to go with them.
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