# What's the deal with rebates?



## debodun (Jun 24, 2015)

When you buy a large ticket item like a car, often a rebate is offered.  Sometime yoiu even have to jump through a few hoops to get it and wait for it which means that rebated money is worth less than it would have been at the initial purchase and you paid sales tax on the pre-rebate price. Why can't merchants just take that rebate money off the purchase price right away?


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## QuickSilver (Jun 24, 2015)

I've never bought a car that didn't deduct the rebate off the purchase price at the time of purchase.. I've bought small items that I had to mail in for the rebate, but really don't bother most of the time because I forget.


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## NancyNGA (Jun 24, 2015)

QuickSilver said:


> ..  but really don't bother most of the time because I forget.



That's exactly what they are counting on with those mail in rebates.   

 I suspect they have computer programs with all the "mortality" figures, just like insurance companies, so they can figure out just what combinations of interest rates, service warranty charges, rebates, initial price, etc...they can charge so that they come out farther ahead, on average.  Then they scramble things around every once in a while just to make you think it's a better deal now than last month, or next month.  Am I cynical, or what?!


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## QuickSilver (Jun 24, 2015)

I agree.... no one leaves a car dealership with a REAL good deal..  They always get what they want.


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## AZ Jim (Jun 24, 2015)

When you deal with a car dealer, don't care, new, used or make and model, it's a case of just how bad they screwed  you, not whether they did or not.


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## QuickSilver (Jun 24, 2015)

Yeah... and they don't even kiss you and tell you you're pretty...


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## RadishRose (Jun 24, 2015)

It's called "slippage" when you forget to mail in the rebate that got you to bite in the first place. Yup, they sure do count on it!


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## Don M. (Jun 24, 2015)

AZ Jim said:


> When you deal with a car dealer, don't care, new, used or make and model, it's a case of just how bad they screwed  you, not whether they did or not.



When I first got out of the Military, I took a job at a Pontiac dealership, selling cars...until I found a Real Job.  THAT was an eye-opening experience that has saved me a bundle over the years.  No matter What kind of a deal or rebate or special offer a dealer makes, they almost always come out on top.  Perhaps 1 in 10 car buyers really get a decent deal....and then, Only when they walk away and wait for the dealer to call them back with a better offer.  

Then, when I was working on computers, I had several occasions to service some of the big auto plants in the Kansas City area....and saw how much it Really costs to make a car/truck.  The manufacturing costs vary...there isn't that much markup on the little economy cars....but the markup on a loaded Pickup truck is huge.  On average, a good bet is that only 60% of the sticker price represents the actual cost of making the vehicle...the remaining 40% is profit, split between the manufacturer, and the dealer.


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## Butterfly (Jun 24, 2015)

AZ Jim said:


> When you deal with a car dealer, don't care, new, used or make and model, it's a case of just how bad they screwed  you, not whether they did or not.



Kinda like insurance companies.


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## Ken N Tx (Jun 25, 2015)

Another money thief is gift/rebate debit cards!! No one will give you change if the item/meal is lower than the gift card!! If you do not ever return to that store, the change becomes theirs!!

Most cases, I had over the remaining balance to the person, waiting inline to pay,behind me..I feel that way I beat the system..


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## debodun (Jun 25, 2015)

Then big ticket sellers pressure you into purchasing "extended warranties" and make you feel like a sub-human if you refuse. I heard that's another big money maker for merchants.


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## Bullie76 (Jun 25, 2015)

debodun said:


> Then big ticket sellers pressure you into purchasing "extended warranties" and make you feel like a sub-human if you refuse. I heard that's another big money maker for merchants.



I had one friend who sold extended warranties on electronics. He said he felt like he was selling air.


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## oldman (Jun 25, 2015)

Ken N Tx said:


> Another money thief is gift/rebate debit cards!! No one will give you change if the item/meal is lower than the gift card!! If you do not ever return to that store, the change becomes theirs!!
> 
> Most cases, I had over the remaining balance to the person, waiting inline to pay,behind me..I feel that way I beat the system..View attachment 18902



Ken..You are right on with this one. I have had several arguments over getting the little bit of difference of left over cash with gift cards that I couldn't count them all. I mean, if I have a gift card with say, 23 cents left on it, why would I want to carry it around for God knows how long until I would need to use it again? I tell the clerk to just give me the 23 cents and they say they can't because of company policy. So, I grab a pack of gum and add the difference to it. I would imagine the big box stores like Walmart, Best Buy, etc come away with millions in unspent left-over gift card money. This is a racket.


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## QuickSilver (Jun 25, 2015)

Bullie76 said:


> I had one friend who sold extended warranties on electronics. He said he felt like he was selling air.




It's a bit different on cars...  Lifetime warrantees cover anything mechanical that breaks..  exception being things that wear out like break pads or windshield wipers..  they also give free oil changes for 4-5 years..  and if you use synthetic oil.. that's a huge savings..  as well as ding and dent repair for up to 5 years..  Road side assistance  and other goodies..   Expensive yes...so you really are paying for the oil changes and such.. but a bumper to bumper lifetime is comforting especially if you tend to keep your cars a long time like I do.. and I figure that I may not be in a position 10 years down the line to pay for a costly repair.   So  how much is peace of mind worth?
I'd be interested in why someone would think this a bad deal?


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## applecruncher (Jun 25, 2015)

Bullie76 said:


> I had one friend who sold extended warranties on electronics. He said he felt like he was selling air.



I can see why people feel extended warranties on electronics is a waste of money. However, I got a 4 yr extended warranty on my 42" TV when I bought it 5 yrs ago. I used it twice for (in home) repair work. Then my TV went out earlier this year. To make a long, complicated story short, they made 2 trips to my home to repair, ordered new parts, tried to repair, and the upshot is I went and picked out a new TV, had it delivered, got another extended warranty, and the total out of pocket cost to me was less that $50 and I'm covered for another 5 yrs. (Otherwise - if I had not gotten the ext warranty 5 yrs ago - the cost for all that would have been in the neighborhood of $600.)


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## Don M. (Jun 25, 2015)

QuickSilver said:


> It's a bit different on cars...  Lifetime warrantees cover anything mechanical that breaks..  exception being things that wear out like break pads or windshield wipers..  they also give free oil changes for 4-5 years..  and if you use synthetic oil.. that's a huge savings..  as well as ding and dent repair for up to 5 years..  Road side assistance  and other goodies..   Expensive yes...so you really are paying for the oil changes and such.. but a bumper to bumper lifetime is comforting especially if you tend to keep your cars a long time like I do.. and I figure that I may not be in a position 10 years down the line to pay for a costly repair.   So  how much is peace of mind worth?
> I'd be interested in why someone would think this a bad deal?



An extended warranty on a car can be a good idea for someone who doesn't know how...or like to...work on cars.  However, like every other warranty, the issuer is betting that most people will pay substantially more for the warranty than they will ever recoup by using that warranty.  In general, if a person carries good full coverage auto insurance to cover any accidents....and does a bit of shopping around for routine repairs...oil changes, tires, brakes, etc., they would probably find that the "extended warranty" is costing them more than the actual needed maintenance.


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## QuickSilver (Jun 25, 2015)

What would those brand new fangled 9 speed transmissions cost to replace?

I think that is what made me consider the lifetime..  I have two new Jeep Cherokees   one 2014 and one 2105.  The 2014 was the first year the car was made and the first time Chrysler ever used the nine speed automatic.   The 2014 has already been called back to have the transmission reprogramed.  Hopefully that will be the extent of it.. but can one be sure?   I don't have to worry about any of that.

As for those who are able to "work" on cars...  Today's new models are not at all like the cars you tinkered with in your garage in the past.  They are MASSIVE computers..  everything in the new cars is controlled by computer..  fixing that may be a problem.


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## Don M. (Jun 25, 2015)

Another expensive "extended warranty" is that which the stores try to sell people when they buy a new Major Appliance.  Case in point....we bought a new refrigerator about 8 years ago, and the store tried to sell us an extended warranty that would cost about $80 a year...after the 1 year manufacturers warranty ran out.  This past February, the wife noticed ice building up in the freezer compartment.  After some basic trouble shooting, I ordered a new Temperature Control, Defrost Control and Evaporator Fan Motor from a great online parts store...AppliacePartsPros.  The parts arrived in 3 days, and cost $103, delivered.  We took the food out of the fridge, put the frozen stuff in the basement freezer, and the perishables in a big cooler.  It took me about an hour to replace the parts, and the fridge had to "stabilize" overnight with the new parts.  By the next morning everything looked good, so we began using the fridge again...and it is still working great after about 5 months.  I figure I saved around 4 or 5 hundred by fixing it myself vs. what some repair person/warranty would have done for us.  Besides, the few times I have called a repairman over the years, I doubt that most of them really have that much training/skill.  I've fixed stoves, washing machines, dryers, and even the outdoor AC unit for a fraction of what these repairman try to charge.


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## QuickSilver (Jun 25, 2015)

We do not buy extended warranties on large appliances... DH is pretty handy and has fixed most of them when we had problems.


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## Don M. (Jun 25, 2015)

As for those who are able to "work" on cars...  Today's new models are not at all like the cars you tinkered with in your garage in the past.  They are MASSIVE computers..  everything in the new cars is controlled by computer..  fixing that may be a problem.[/QUOTE]

Yup, today's cars are a technological "nightmare" compared to what existed just 15 or 20 years ago...the car manufacturers have gone overboard with "technology", IMO.  I had a "run in" with that technology a couple of weeks ago, when the "service traction control" indicator came on in our Impala.  I bought a service manual when I bought the car, so I did some research, plus queried others on a good online Forum about this symptom.  I traced the problem to a chafed wire on the left rear ABS sensor that was rubbing the suspension, and fixed it for next to nothing with some electrical tape, and rerouting the bracket that holds the wires.  If you take a car to the dealer with ABS/Traction Control problems, they put down $150 on the bill, and the costs quickly go up from there.  

While I was poking around the suspension/brakes, I found a warped rear disc brake rotor that has been causing some brake vibration during hard braking.  I got new rotors, ceramic brake pads, and  pad clips, from RockAuto.com for $75, and this is my next "rainy day" project...probably tomorrow, if the forecast is correct.  The dealer would charge at least $300 to do the same repair.


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## Don M. (Jun 25, 2015)

QuickSilver said:


> We do not buy extended warranties on large appliances... DH is pretty handy and has fixed most of them when we had problems.



I've fixed "broke stuff" all my life....and I take it as a matter of "personal Pride" to be able to do my own repairs.  When I get to the point where I can no longer do this, it will probably be time to hang it up and move to an old folks home.


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## applecruncher (Jun 25, 2015)

I'm proud that I've been able to fix _some _computer problems.  But TV, DVR, stove, regrigerator......no.  I can't fix/repair those, and neither can most people I know.


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## oldman (Jun 25, 2015)

QuickSilver said:


> It's a bit different on cars...  Lifetime warrantees cover anything mechanical that breaks..  exception being things that wear out like break pads or windshield wipers..  they also give free oil changes for 4-5 years..  and if you use synthetic oil.. that's a huge savings..  as well as ding and dent repair for up to 5 years..  Road side assistance  and other goodies..   Expensive yes...so you really are paying for the oil changes and such.. but a bumper to bumper lifetime is comforting especially if you tend to keep your cars a long time like I do.. and I figure that I may not be in a position 10 years down the line to pay for a costly repair.   So  how much is peace of mind worth?
> I'd be interested in why someone would think this a bad deal?



Even with extended warranties, we need to be careful; reason being, so many of these companies have come and gone under bankruptcy. It is not as bad of a problem as it once was, but still, the problem does exist. There are a few very quality extended warranty companies in the business. However, even some dealers get duped by the bad ones. It is a good idea for those that buy extended warranties to check at least once a quarter to make certain that they are still in business. I bought an EW when I bought my 2008 GMC Envoy SLT. I bought it for coverage to 100,000. GMC warrantied the drivetrain at that time to 100,000 miles, so I was actually paying for a warranty that covered items that really weren't all that expensive. Typical wear items like brakes, tires, tune up items and so forth are also not covered. But, at 68,000 miles four of the fuel injectors went bad and needed replaced. The entire spider (that's what they call the full injector assembly) was replaced. The cost to replace was $1400.00 This was exactly the amount that I paid for the EW, plus I also needed a $450.00 water pump installed. So, in my case, it worked out. (No, mine did not cover oil changes and normal maintenance. Here in PA, we also have two inspections done once per year, (one mechanical and one emissions), which it also does not cover, except if parts are needed like, ball joints, struts, catalytic converter, etc.) 

Remember, extended warranties have a 100% profit margin (mark-up) by the dealer, so they are always negotiable. You do not have to buy your EW from the dealer you buy the car from. You can buy one off of the internet with one of the favored companies. My other advice is to be careful; do your homework and buy from a reliable top-rated company. I bought mine from Delta Auto and I believe they are located in Philadelphia. You pay a little more, buy like QS has already stated, "what's peace of mine worth?"


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## debodun (Jun 25, 2015)

It's like a BOGO (buy one, get one free) sale at the store. Most people don't realize that during a BOGO, the price is doubled. So where's the savings?


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## applecruncher (Jun 25, 2015)

If you buy an item even smi-regularly, you should know what the price is. If they've doubled the price, I would not buy it. I've never had this happen, and I get quite a few BOGOs.

True, some people are not as in tune with prices as others, but maybe they _should_ be.


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## Butterfly (Jun 25, 2015)

Don M. said:


> Another expensive "extended warranty" is that which the stores try to sell people when they buy a new Major Appliance.  Case in point....we bought a new refrigerator about 8 years ago, and the store tried to sell us an extended warranty that would cost about $80 a year...after the 1 year manufacturers warranty ran out.  This past February, the wife noticed ice building up in the freezer compartment.  After some basic trouble shooting, I ordered a new Temperature Control, Defrost Control and Evaporator Fan Motor from a great online parts store...AppliacePartsPros.  The parts arrived in 3 days, and cost $103, delivered.  We took the food out of the fridge, put the frozen stuff in the basement freezer, and the perishables in a big cooler.  It took me about an hour to replace the parts, and the fridge had to "stabilize" overnight with the new parts.  By the next morning everything looked good, so we began using the fridge again...and it is still working great after about 5 months.  I figure I saved around 4 or 5 hundred by fixing it myself vs. what some repair person/warranty would have done for us.  Besides, the few times I have called a repairman over the years, I doubt that most of them really have that much training/skill.  I've fixed stoves, washing machines, dryers, and even the outdoor AC unit for a fraction of what these repairman try to charge.



Well l am very glad I bought the warranty on my huge double-door fridge from Sears.  The thing up and died (they said it was major compressor woes).  It would have cost them more to fix than to replace, so they gave me a new one, PLUS money for the food I had lost.


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## Butterfly (Jun 25, 2015)

applecruncher said:


> If you buy an item even smi-regularly, you should know what the price is. If they've doubled the price, I would not buy it. I've never had this happen, and I get quite a few BOGOs.
> 
> True, some people are not as in tune with prices as others, but maybe they _should_ be.



I agree.  I watch those BOGOs carefully.  Sometimes they are a very good deal.  Most stores around here don't double the prices -- people would notice and have a fit!


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## Ken N Tx (Jun 26, 2015)

Butterfly said:


> I agree.  I watch those BOGOs carefully.  Sometimes they are a very good deal.  Most stores around here don't double the prices -- people would notice and have a fit!



..Our local stores want us to return..

I have fixed outdoor AC units, washers,dryers ovens..etc..Online parts are available.


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## QuickSilver (Jun 26, 2015)

I shop at Jewel... Yes... they double the BOGO price on ribs..   I always laugh..  Usually a slab of Hormel back ribs is $10 to $11  on BOGO day it's $20.. I always ask the Butcher if they think we are stupid...  He just shrugs and says he does what he is told..   Apparently these big chains really DO think everyone is stupid..  What they are doing is fraud and forcing people to by two even if they really only want and can afford one.


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## Ken N Tx (Jun 26, 2015)

Some of our stores offer can goods for 4 for a dollar..You are not required to buy 4, at the check out one registers as 25 cents.


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## WhatInThe (Jun 28, 2015)

A lot of rebates are for accounting purposes and others, especially the one's the consumer has to mail in are used on the premise that only a small portion of them will be sent in or requested. I saw one number that as little as 25% of the consumers take advantage of things like mail in rebates.  

With big ticket and something like a car it's accounting because sometimes they're offered by the manufacturer and others the dealer. They also affect how fast a dealer might get money or credit for a sale. There are also laws on how long an item can be sold at reduced price, in other words it could considered false advertising if it's on sale too much. Theoretically it should be the regular price. I heard of laws number of days per year and number of days in row. Rebates skirt around that issue.

I thought on small ticket stores had to provide rebate forms and clear instructions on how to get it. I don't like some rebates because these companies get personal information on what should've been a private transaction between you and the store. Many rebates are fishing expeditions for personal information and marketing. I tend to avoid rebates and store cards for that reason alone.


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## Phillygal (Jun 28, 2015)

I purchased a home warranty several years ago when I upgraded the olive appliances that came with the house to stainless. 

I don't know how they make money. Aside from all the repairs (for which I pay $50 ea), they've replaced my hot water heater, my stove, and my washer machine. 

I am extremely frugal, know my prices. BOGOs here never raise the base price. When I combine them with coupons I often get items for pennies. 

As for cars, the first mistake (IMHO) is buying new. I haven't bought a new car or had a payment since 1994. 

In all that time, aside from routine maintenance, I had one car break down on me. A Durango, the computer went, $700. I was still so far ahead. I also avoid cars with under 100,000 miles. By then, the kinks are worked out


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## WhatInThe (Jun 28, 2015)

Phillygal said:


> I purchased a home warranty several years ago when I upgraded the olive appliances that came with the house to stainless.
> 
> I don't know how they make money. Aside from all the repairs (for which I pay $50 ea), they've replaced my hot water heater, my stove, and my washer machine.
> 
> ...



Don't know how they make money.

They make money because enough people did NOT make a claim. The whole concept of insurance is a bet. The policy holder is betting they will need it and the seller is betting they won't. Same for the extended warranties and service plans. Their set up under the premise that only a certain percentage of customers will use them. This is also why many of these plans are loaded with fine print or exclusions. They are stacking the odds in their favor because these service plans & extended warranties are a form of insurance which is a bet.


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