Buyers are the real winners in cash-back car deals as they have more to gain than the dealer that is selling the car, according to used-car platform Motus Select.
Cash-back promotions offer buyers a monetary rebate when they finance an advertised vehicle in full, which can subsequently be used to pay off the loan, put down a deposit, or spend in any other way they see fit.
For example, if you buy a R250,000 car with a R25,000 rebate, you will only have to finance R225,000. Alternatively, you can finance the full amount and use the rebate for fuel, insurance, accessories, or something you might need around the house.
“Whether you’re on a budget or searching for your dream vehicle, cash-back car deals and similar offers are always worth considering,” said Motus.
How it works
Cash-back deals in the automotive industry work much differently than in any other business, as it is a rebate that is offered to dealerships directly from the vehicle manufacturer.
“This, in turn, is given to [the buyer] when they choose to finance a vehicle in full from the advertising manufacturer,” said Motus Select.
Many consumers tend to shy away from these offers as it is unclear how the automaker benefits from them, which creates cautionary behaviour.
Motus emphasises that while the customer is the real winner in these types of promotions, the manufacturer also benefits due to higher sales that drive growth and market share, while simultaneously opening up inventory space for upcoming releases and introductions.
As the dealer isn’t sacrificing any of its own money by providing a rebate, it also stands to gain from a boost in sales and profits, creating a win-win-win situation for all parties involved.
As such, cash-back promotions are attractive options for car shoppers looking to get the best deal possible in a certain price bracket.
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