GlenCalc

Cash back or low interest calculator

Car makers often offer a choice: a cash rebate, or a low promotional rate instead. Enter both offers to see which costs less over the loan.

From your bank or credit union.

Your answer

Better dealTake the low rateSaves $850.51
Payment with rebate$626.12
Payment with low rate$611.94
Total paid with rebate$37,567.00
Total paid with low rate$36,716.50

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How we worked it out

Updated as you change the numbers.

  1. Rebate: borrow $32,000.00 at 6.5%.
  2. Low rate: borrow $35,000.00 at 1.9%.
  3. Compare the total of all payments for each.

Method and assumptions

Taking the rebate lowers the amount borrowed but means financing at your own bank’s rate; the promotional rate keeps the full price but charges less interest. The cheaper offer is the one with the smaller total of payments over the same term. If sales tax applies to the rebate in your state, the rebate is worth slightly less.

Questions

Is 1.9% financing better than $3,000 cash back?

On $35,000 over 60 months against a 6.5% bank loan, the 1.9% rate saves about $850.

Sources

Method and figures checked on . Every worked answer on this page is covered by an automated test. Found a mistake? Tell us.

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