Rebate Vs. Low-Interest Car Payment Comparison Calculator
Dec 05, 2023
This car payment calculator will help you decide whether a rebate vs. low-interest auto loan is best for your needs. Most manufacturers won’t let you combine a 0 percent APR (annual percentage rate) offer with a rebate, so you’ll need to determine which option would help you save the most money.
A rebate is cash back that typically comes from the car’s manufacturer. You can combine it with a standard auto loan from the dealership or another lender — and comparison shopping can help you find the lowest interest rate available. But if you accept a low-APR deal from the manufacturer or dealer, you likely won’t be able to claim the rebate.
Calculate your car payments
This car payment calculator will help compare financing between a credit union or bank and low-interest dealer financing. Dealers or manufacturers often offer rebates or low-interest financing, but rarely both together. Combining a rebate with a higher interest bank or credit union car loan may provide a lower initial loan balance and, in many cases, a lower monthly payment. The better choice depends on the price of the vehicle, the amount of the rebate and the interest rate.
How to calculate your car payments
To find if an auto rebate or low-interest financing is best for you, follow the below steps..
- Enter loan information. To begin the comparison process, first enter the total auto financing price including any additional tax rates. Then input your traditional financing rate and the manufacturer rebate amount.
- Adjust financing numbers. Use the sliders to determine how varying the rates and terms will shift the resulting monthly payments.
- View the report and compare. View the full report with a complete list of the components used to calculate the values. This makes it easy to decide which option will help you save the most money over the loan’s lifetime. You can also print this report.
Auto rebates vs. low-interest financing
While an auto loan rebate and low-interest financing both save you money, they do so differently.
- A rebate is an incentive that will give you money back in exchange for the vehicle purchase. Its main benefit is lowering your total loan amount because it will likely be applied to your down payment.
- Low-interest financing, on the other hand, means that you finance the full cost — minus your down payment — but you pay less interest over the life of the loan. A common form of low-interest financing is 0 percent APR deals, which allow drivers to borrow money for free. However, only those with excellent credit qualify.
Dealers or manufacturers often offer rebates or low-interest financing, but rarely both. Combining a rebate with a bank or credit union car loan may provide a lower initial loan balance and, in many cases, a lower monthly payment. The better choice depends on the price of the vehicle, the amount of the rebate and the interest rate.
If you don’t qualify for a 0 percent APR deal, it’s likely an auto rebate will save you more money. However, it is important to calculate the expected costs before agreeing to one over the other.