Subvented Financing

Subvented financing is a subsidized interest rate or incentive provided, often by the manufacturer, to reduce the cost of borrowing for the customer. Common examples are 0% or low APR financing deals on new vehicles, where the automaker or dealership absorbs some cost to offer below-market interest rates. In Canada, subvented financing helps dealerships attract buyers by offering very affordable loan terms. Sales teams use these promotions to increase volume, while ensuring customers qualify (usually O.A.C.) for these special rates.