Cashback or Low Interest Calculator | Car Financing Comparison Tool
Compare cashback rebates versus low interest financing offers to determine the best auto loan option for your vehicle purchase with our free calculator.
Category: Financial
Enter Vehicle Details
Comparison Results
Cash Back + Regular Rate:
$425/mo
Low Interest Rate:
$437/mo
Cash Back Total Cost:
$25,483
After $3500 cash back
Low Rate Total Cost:
$26,226
At 1.9% interest
Cash Back Offer is better!
Cumulative Cost Comparison
- Cash Back Option
- Low Interest Option
This graph shows the cumulative cost over time for both financing options. The breakeven point (if any) is where the two lines intersect.
If you plan to keep the vehicle for the full loan term, choose the option with the lower total cost. If you plan to trade in or pay off early, consider which option is better for your expected ownership period.
Frequently Asked Questions
Should I take the cashback rebate or 0% financing when buying a car?
It depends on your specific situation. Generally, if you plan to pay off the loan quickly or have access to low-interest loans elsewhere, the cashback rebate is often better. If you'll keep the loan for its full term and market interest rates are high, the 0% or low-interest financing might save you more money. Our calculator helps you compare both options based on your specific numbers.
How do car dealers make money on 0% financing offers?
Dealers can offer 0% financing because: 1) They've built the financing costs into the vehicle's price, 2) They're subsidized by the manufacturer to promote sales, 3) They may restrict 0% offers to specific models they want to clear from inventory, or 4) They might make up the difference by offering less on your trade-in or selling add-ons and extended warranties.
Can I negotiate the price of a car and still get the cashback or special financing?
Yes, in most cases you can negotiate the vehicle price regardless of whether you take the cashback or special financing offer. However, some dealers may be less willing to negotiate on price if you're already getting a significant incentive. Always negotiate the vehicle price first, before discussing financing options.
What is the 'break-even point' in cashback vs. low interest comparisons?
The break-even point is the time during your loan term when the total cost of both options becomes equal. Before this point, one option is more cost-effective; after this point, the other option becomes more cost-effective. This calculator identifies the break-even month to help you decide which option makes more financial sense based on how long you plan to keep the loan.