Compare a low-APR financing offer against a cash rebate with a standard APR. See the monthly payment and total cost of each, and which auto deal actually saves you more money.
Which auto offer wins?
Car dealers often make you choose between a manufacturer's low promotional APR (like 0.9% or 1.9%) and a cash rebate that you must finance at a standard market rate. The low APR reduces your interest; the rebate reduces your loan balance but at a higher rate. The winner depends on the size of the rebate, the gap between the two rates, the amount financed, and the loan term.
This calculator computes the monthly payment and total cost (payments plus down payment) for each option so you can see exactly which is cheaper. As a rule, larger rebates and shorter loans favor the cash back, while small rebates with a big rate gap favor the low APR — but always run the numbers, because the answer flips depending on the deal.
The rate gap is large, the loan is long, and the rebate is small. Cheap money beats a modest discount over many months.
The rebate is large or the loan is short. A big upfront discount beats a small interest saving you'd only realize slowly.
Don't just compare monthly payments — compare the total of all payments plus your down payment. That's the true cost of each offer.