How do factory rebates on cars work?

I might be buying a new car soon. One of the models I have been considering currently has a factory rebate. If I buy it, how does the rebate work? Is it added to my down payment? Or do I get a check in the mail?

Generally, it is added to your down payment.

Watch out for rebates and ‘factory incentives.’ They become one more shell in the shell game dealerships play, hiding other costs and profit behind a largely phantom contribution from The Manufacturer. (For example, they advertise a whopping $5k factory incentive on a pickup, but take it from the MSRP… when pretty much any other day of the year the sticker price is $3-4k under MSRP anyway.)

Buy a car by doing your homework, figuring dealer price plus fixed elements like (sigh) delivery, and work upward from there until the dealer says yes. If you start with their numbers on price, discounts, financing, etc. you’re pretty much guaranteed to get screwed, since they can keep generously cutting the cost until you say yes… having paid much more than you would have the other way around, and convinced you got a great deal.

Oh, down payments.

Well, for us it just meant that the rebate was subtracted from the total cost and we signed something turning it over to the dealer. Calling this a “rebate” is a joke.

Yeah, be careful about the dealer playing fast and loose with these things. Just figure on the total cost period in negotiating.

If it’s an actual factory cash back rebate you can either apply it towards the down payment or get a check sent.

BIOT some dealerships get weird about the latter. Don’t know why. I always take a 60 month loan and add to my payments so I pay the car off in 24-30 months. So I take the check and send it in against the principle. I’ve done the math and it works out about the same. But I’ve had them try to talk me out of it. The more they try the more I know I’m doing the right thing!!!

If you’re just going to apply it to the principal, why not do it on the front end and let the dealer apply to the down payment?

You sound like one of the sales people at a dealership. Because that’s the way I want to do it and I don’t have to explain myself to anyone. Plus it bugs the shit out of some of them. Blrrp (raspberry :wink: )