What is a "rebate"?

What is a "rebate"?

James Bell (Publisher, Auto Reviewer) gives expert video advice on: What does "balloon payment" mean?; What does "base value" mean"?; What does "buy here, pay here" financing mean? and more...

With regards to financing your car, a rebate is an incentive that generally comes from the manufacturer, something that's passed from the manufacturer directly to the consumer. A rebate is additional funding, for example a $2,000 rebate can be used as funding i.e. if you buy the vehicle for $20,000, and we'll give you $2,000 rebate. A rebate can also and is often used though to increase the down payment on the vehicle, so it's basically funding assistance from the manufacturer to the consumer.