How does trade assistance really work?

[KleinBoontjie]

My wife is in the market to get herself a new car. She asked me to look for something.
I came accross this: LINK

How does this Trade Assistance work? Like the Jazz in the example I posted, say it cost R144 000. Will they then take the R40 000 and deduct it from the R144000 and then finance the car for R104 000? Or will it be R144 000 plus interrest, minus R40 000, then finance it?

Also saw yesterday at Autopedigree a Kia Cerato where you get R20 000 cash back. Is that the same thing?

It feels like there is a catch somewhere? Like I'm going to pay more on interrest or sumthin...

 

[piranha786]

Interest is not put upfront on the car, its calculated monthly, without confusing you more.
Say the car you have trade for R20 000, they will add R40 000 to it, i.o.w your trade in will now be R60 000. So if the price of the new car is R170 000, R110 000 will be borrowed from The bank, and interest will be added to this amount.

 

[HapticSimian]

Trade-in assistance is exactly what it says - extra money to assist you in trading in. It's paid to the dealer by the manufacturer, on the provision that the dealer submits paperwork to show that you did indeed trade in a car. If it is specifically indicated as 'trade-in assistance', that is. When advertised as 'cash back' it is usually independent of whether you're trading in or not.

Regardless, the money can be deducted from the purchase price or added to your trade-in offer. The latter will be done if you still owe the bank more on yourr current vehicle than what you've been offered on trade.

There is no catch. If there's one caveat, you might get low-balled on the trade-in offer...