When we buy a car and getting cash rebates, what actually is happening and what is the profit?

Answer 1

For example, if you buy a car at $40,000, when apply for loan, the agent will put the car price at $50,000. So, if you take 90% loan, will be $45,000. Which meant the actual car price is only $40,000, but you will have to pay $45,000 loan with interest. The different of $5000 will be use to pay your road tax, insurance and left over is your cash rebate.

Answer 2

There is no free lunch in this world. The profit is actually the interest you need to pay when you buy the car. The interest varies with the market rate and normally it goes up and seldom comes down.