Cash Back or Low Interest Calculator

Take whichever leaves you paying less over the whole loan. Taking the rebate cuts the amount you finance today, but you borrow the rest at the normal market rate. Low-rate (or 0%) financing keeps the full price but charges little or no interest. On a $35,000 car with a $3,000 rebate, financing $32,000 at 6.5% totals about $37,560, while financing the full $35,000 at 0.9% totals about $35,820 — so the low rate wins by roughly $1,740. Change any input above and the winner recalculates instantly.

0% APR means the low-rate option costs exactly the sticker price spread over the term — no interest at all. The rebate option instead subtracts the rebate up front but adds interest at the market rate on the smaller balance. The rebate wins only when the up-front discount is larger than the interest you would pay on the full price at the promo rate. With a true 0% offer the promo side has no interest, so the rebate has to be quite large to beat it.

Put both offers on the same term and compare the total of payments, not just the monthly figure. A rebate lowers the balance, so its monthly payment can look higher or lower depending on the two rates — the honest comparison is lifetime cost. This calculator finances price minus rebate at the market APR for one option and the full price at the promo APR for the other, then reports the total each option pays and the dollar gap between them.

In most US states sales tax is charged on the price before the rebate is applied, so the rebate does not lower your tax bill — it only lowers what you finance. Because sales tax is the same under either offer, it cancels out of the comparison and does not change which option wins. This calculator therefore compares the financed price and interest directly; add tax equally to both if you want the out-the-door totals.

Longer terms favor low-rate financing. The promo rate saves you interest on every one of the extra months, so the longer you borrow, the more a 0% or near-0% rate is worth versus a one-time rebate. Short terms favor the rebate, because there is less interest for the higher market rate to pile up. Drag the term slider above to watch the winner flip.

Yes — most buyers let the rebate reduce the amount financed, which is exactly what the rebate option here does (it finances price minus rebate). You could instead pocket the rebate as cash, but then you finance the full price at the market rate and come out worse than either option shown. If you take the low-rate financing you generally cannot also claim the rebate; manufacturers make you pick one.

Not really. A down payment lowers both balances by the same amount, so it shrinks the interest on both sides roughly proportionally and rarely flips the winner. What moves the needle is the gap between the two interest rates, the size of the rebate relative to the price, and the length of the term — the three inputs this calculator focuses on.