Compare a car dealer cash rebate vs a low APR offer using the same loan term and your numbers, then see monthly payment, total interest, and total all-in cost for each option.
Advanced options
| Scenario | Winner | Cost difference |
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How to use this calculator
- Enter the negotiated vehicle price before incentives.
- Enter the loan term in months (example: 60).
- Enter the standard APR you would get if you take the cash back.
- Enter the promo APR you would get if you skip the cash back (this tool assumes the promo APR lasts for the full term).
- Enter the cash rebate amount and your down payment.
- Open Advanced options if you want to include a trade-in, sales tax, and fees, and choose whether fees are financed.
- If you include sales tax, pick the tax method that matches your state or dealer worksheet (tax after rebate vs tax before rebate).
- Click Calculate and compare total all-in cost (not just the monthly payment) and the break-even rebate amount.
Definitions
APR (annual percentage rate): The yearly interest rate for borrowing money, shown as a percent. APR helps you compare loan costs across offers.[3]
Cash back (rebate): A discount that lowers what you pay for the car. It often reduces the amount you need to borrow, but sales tax rules can change how much it really saves.[2]
Amount financed: The starting loan balance after applying rebate (if any), down payment, trade-in, taxes, and any fees you choose to finance.
Monthly payment: The fixed payment you make each month for an installment loan when the rate and term stay the same.
Total interest: Total of all monthly payments minus the amount financed. This is the cost of borrowing.
Total all-in cost: Up-front cash you pay plus all monthly payments over the term. This is the main number to compare options.
Methodology
What this calculator compares
It compares two mutually exclusive dealer offers for the same car: (1) take cash back (rebate) and use the standard APR, or (2) skip the rebate and use the promo APR. For each option it estimates amount financed, monthly payment, total interest, and total all-in cost over the full term.
Inputs and sales tax assumption
You can include sales tax and choose how the rebate affects the taxable price: (A) Tax after rebate means the rebate reduces the taxable price, or (B) Tax before rebate means the rebate does not reduce the taxable price. Because rules vary, the calculator makes this a user choice instead of hiding an assumption.[2]
Taxable price and sales tax
Taxable price is calculated as: taxable_price = max(0, auto_price - trade_in_value - (tax_method is after_rebate ? rebate_applied : 0)). Sales tax is: sales_tax = taxable_price * (sales_tax_rate/100). Taxable price is floored at 0 so tax never becomes negative.
Up-front cash vs financed fees
Up-front paid amount is: upfront_paid = down_payment + (include_fees_in_loan is no ? title_reg_fees : 0). If you choose to finance fees, the fees are added to the loan instead of being paid up front.
Amount financed (starting loan balance)
For each option: amount_financed = (auto_price + sales_tax + (include_fees_in_loan is yes ? title_reg_fees : 0)) - down_payment - trade_in_value - rebate_applied. For the cash-back option, rebate_applied = cash_rebate. For the low-interest option, rebate_applied = 0. If amount_financed is 0 or less, the calculator treats it as no loan needed: payment = 0, total interest = 0, and total payments = 0, then compares options using total all-in cost based on up-front amounts.
Monthly payment and totals
Monthly rate is: monthly_rate = (APR/100)/12. If monthly_rate is 0, monthly payment = amount_financed / loan_term_months. Otherwise it uses the standard fixed-payment loan formula: payment = amount_financed * (monthly_rate*(1+monthly_rate)^loan_term_months)/((1+monthly_rate)^loan_term_months - 1). Total payments = payment * loan_term_months. Total interest = total payments - amount_financed. Total all-in cost = upfront_paid + total payments.
Winner and difference
The cheaper option is the one with the lower total all-in cost. Difference is calculated as: difference_total_cost = total_cost_cash - total_cost_promo. A negative difference means cash back is cheaper; a positive difference means low-interest is cheaper.
Break-even rebate (tie point)
The break-even rebate is the rebate amount R that makes both total all-in costs equal, holding all other inputs the same. The calculator solves for R using bisection over the range from 0 to auto_price. If the difference never crosses 0 in that range (no sign change), it returns N/A and explains that one option stays cheaper across the tested rebate range.
Validation and edge cases
Loan term must be greater than 0 months. APR inputs must be provided and must be 0 or higher (blank is not allowed). Money inputs must be 0 or higher. If sales tax rate is left blank, the calculator treats sales tax as 0 and includes a note so you know tax was not applied. Results are rounded to cents for display, but calculations use full precision.