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Because there is no financing involved in the purchase, it doesn't matter whether the interest rate is 0% or 10%.Īlmost all vehicle cash rebates originate from car manufacturers rather than car dealers because their goal is to further incentivize potential buyers to buy cars, usually to get rid of old inventory or to jump-start sales for vehicles that aren't selling well. While it may be the ideal form because of its instantaneous application, some are in the form of a mail-in rebate from the manufacturer they arrive as a check or prepaid credit card four to eight weeks later.īuyers who plan on paying cash entirely upfront will only benefit from the cash rebate option. An instant rebate on a car is an immediate deduction off the negotiated price of the car. Rebates may be distributed in several different ways. Luckily, many states do not tax cash rebates these states are Alaska, Arizona, Delaware, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Utah, Vermont, and Wyoming. For example, the purchase of a vehicle at $30,000 with a cash rebate of $2,000 will have sales tax calculated based on $30,000, not $28,000. view cash rebates as payments from auto manufacturers. Some dealers may require the financing of the auto loan for a car purchase to be done through a captive lender in order to qualify for a rebate. It is also not uncommon for rebates to be given to returning customers trading in a same-make vehicle from previous years, or switching from a competitor's model, which is sometimes called a conquest incentive. In some cases, the rebate is large enough to cover the entire down payment.Īside from vehicle rebates available to any potential buyer, there can be special rebates such as those for people who served in the military, current students, or first-time buyers. The amounts generally range between a few hundred to a few thousand dollars. Related Auto Loan Calculator | Auto Lease CalculatorĪ vehicle cash rebate is an additional deduction on the purchase price of a car. With Low Interest Rate Offer Total Loan Amount