What Really Are Auto Rebates?

A rebate is defined as the sum that is deducted from an amount to be paid. It is also said to be the return of part of a sum given as payment for some good or service. When these rebates are given in relation to the sale of motor vehicles the term used to describe them are auto rebates.

Auto rebates are in essence not much different from the discount you may get at your local supermarket. Whereas the supermarket may give you a lower price on an item or furnish you with coupons, which you can use to help to buy other goods, in the automobile world auto rebates carry out these functions.

The reasons why people involved in the sale of automobiles, such as dealers and automakers, may want to offer auto rebates to their customers will vary. The primary reason however, is to boost the sales of their merchandise and by extension their profits. The auto rebates that may be offered to customers by car dealers and manufacturers will usually come in three forms. These are the cash rebates, special leases, and low-interest financing.

Of the three auto rebates the most popular and widely known is the cash rebate. This is a type of incentive a car manufacturer will offer where the customer is promised some money back in the form of cash if he makes a car purchase before a specified period of time has elapsed. The amount of the monies involved here can be anywhere between a low of a couple of hundreds to a high of a few thousands. The name cash rebate in this instance can be a bit misleading because after buying the car rarely does the customer ever leave the car lot with the actual check in the amount of the rebate. What will usually happen is that the amount of the rebate is applied to the cost of the car so the purchaser will end up paying that amount less for the motor vehicle.

Believe it or not, sometimes the government will offer auto rebates as well. The reason for the government offering auto rebates is similar to that of the car manufacturer in some respects but there will be a slight twist. While the car manufacturer will want to boost sales in order to ultimately increase his profits, the government may have jumpstarting a sluggish economy as its underlying motive. The government could also have the ultimate goal of getting more environmentally friendly cars into the hands of consumers. The auto rebate would make these vehicles a more attractive option for those in the market to buy cars as they may use alternative fuels and be hybrids, which would normally cost more than regular cars. It should be noted too that getting auto rebates from the government requires a different process from that involved in getting auto rebates from a car dealer.

Although what we are accustomed to is the idea of auto rebates being given for the acquisition of new cars there are times when they are given for the purchase of used cars as well. This type of rebate is not commonly seen and in these instances is given by the auto dealers themselves instead of the car manufacturers as in the case of new cars. The amounts involved here will usually be less than with new cars and will vary based on a number of factors including, mileage and condition in addition to the usual model and make factors.

The above information by no means exhausts the subject of auto rebates but should provide a sound basic background for one seriously considering purchasing a motor vehicle. Auto rebates are indeed useful tools so make use of them.


Auto rebates would make these vehicles a more attractive option for those in the market to buy cars as they may use alternative fuels and be hybrids, which would normally cost more than regular cars.