Compare a cash-back rebate with low-rate dealer financing to see which saves more.
Option 1: cash back + your own loan
Option 2: low dealer financing
| Option 1: Cash back | Option 2: Low rate | |
|---|---|---|
| Loan amount | $32,300.00 | $35,300.00 |
| Rate | 6.5% | 1.9% |
| Monthly payment | $631.99 | $617.19 |
| Total interest | $5,619.20 | $1,731.21 |
| Total of payments | $37,919.20 | $37,031.21 |
Please do not make financial decisions based on these results.
What is the Cash Back or Low Interest Calculator?
Dealers often offer either a cash rebate or a very low financing rate, not both. This calculator compares the total cost of each choice over the same term.
Lowering the cost
A larger down payment, a shorter term and a lower rate all reduce what you pay. Dealers often offer either a cash rebate or special financing, and the cash back or low interest calculator shows which one saves more.
How to use the Cash Back or Low Interest Calculator
- Enter your numbers. The inputs are Vehicle price ($), Down payment ($), Sales tax (%), Fees ($), Loan term (months), Cash back / rebate ($), Loan rate from your bank (%). Use the out-the-door price, not the sticker price, and the rate on your financing offer. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the Take the low interest rate. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the Cash Back or Low Interest Calculator using the default values shown in the calculator above:
Inputs
| Vehicle price ($) | 35,000 |
|---|---|
| Down payment ($) | 3,000 |
| Sales tax (%) | 8 |
| Fees ($) | 500 |
| Loan term (months) | 60 |
| Cash back / rebate ($) | 3,000 |
| Loan rate from your bank (%) | 6.5 |
| Dealer promotional rate (%) | 1.9 |
Results
| Take the low interest rate | Saves $887.98 |
|---|
With these inputs the calculator returns Take the low interest rate: Saves $887.98. Change any value in the calculator to see how the result moves.
Tips for better results
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. Dealer fees, taxes and your credit profile change the real figure; confirm them in the finance paperwork. It is for information, not financial, tax or legal advice.
Frequently asked questions
Which is usually better?
Low rates win on large, long loans. Rebates win on small loans or when the rates are close.
When does the rebate win?
When your own loan rate is close to the promotional rate, or the loan is small or short, because the rebate outweighs the interest difference.
Is a shorter loan better?
A shorter term has a higher payment but costs much less interest overall.
Is it better to lease or buy a car?
Buying costs more per month but you own the car afterward. Leasing has lower payments but you return the car or pay the buyout. Compare total cost over the period you plan to keep it.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.