How Do Auto Rebates Work?

Mitsubishi shows of the i-MiEV at the Green Living Show in Toronto, Canada, on April 13, 2012. The i-MiEV, an electric car with a top speed of 130 km/hour and top range of 155 km. The Ontario government offers a rebate of over $8,000 for those that purchase the $32,000 vehicle. Matthew Little/The Epoch Times

You’re usually on the hunt for a good deal when heading out to purchase a new car. And even if you know what you want, saving money is at the top of the list.

Manufacturers often offer rebates on new vehicles. But exactly what are these, and how do they work? Do they really save you money?

Rebates Act as Incentives

An auto rebate is a discount or incentive offered by a car manufacturer to encourage the purchase of a particular vehicle. Think of it as a cash return for purchasing a new vehicle.