If you’re new to the world of rebates, it’s always good to understand how they work before accepting them. First of all, what are rebates? A rebate is the auto manufacturer’s way of motivating us to buy. It is a set amount of money (cha-ching!) that is taken off the price of the vehicle at the time of purchase. Dealerships are reimbursed the entirety of the rebate by the manufacturer. Keep this is mind if a dealer ever tries to leverage a deal by saying they are losing money with the rebate, that would be entirely false. Since rebates are directly from the car manufacturer, the dealership is not entitled to keep any portion of that money. Rebates only last a certain time period and they are only available on specific models. This is all conditional, but still $3,000 off of a vehicle is a lot of money and I for one would be open to hearing more about the offer.
Another important note is that most states do tax the rebate. These states view it as the manufacturer giving the customer money towards the vehicle. So if you have a car priced at $20,000 and they are offering $3,000 cash rebate, you will be taxed on that $20,000 price. When purchasing anything, always weigh the pros and cons. Rebates can really make a deal. For instance, if you are trading a vehicle where you owe $3,000 more than the value, a vehicle model with a $3,000 rebate may offset that negative equity. Not all brands offer rebates, reason being, they feel it makes the brand less luxurious. In short, rebates can be a terrific thing yet they might not be the best option depending on what your needs are. It is always good to understand how things work before making your way to the dealership!