Rebate

A rebate is a fixed reduction in the retail price of an automobile that is set by the manufacturer in order to increase sales of that model. Depending upon state law, a rebate is either taxable and shown as a cash down payment, or non-taxable and shown as a reduction in the selling price of the vehicle. Depending upon the program, buyers may be able to choose between a cash rebate and a subvented (reduced and supported by the lender) interest rate.