Cash Back or Low Interest Calculator
Which offer costs less?
Inputs
$
yrs
$
%
%
Result
Cash-Back Payment$651.23
Low-Rate Payment$611.94
Better ChoiceLow Interest
Total Savings$2,357.50
About the Cash Back or Low Interest Calculator
The Cash Back or Low Interest Calculator compares two dealer offers — a rebate at the regular rate versus a manufacturer-subsidized low APR — and shows which produces the lower total cost.
Calculation method
It amortizes both scenarios: (Price − Cash back) at the higher rate, versus full price at the promotional rate, then compares total payments.
Payment1 = amortized(Price − Rebate, HighAPR, Term)
Payment2 = amortized(Price, LowAPR, Term)How to use this calculator
- Enter the vehicle price and loan term.
- Enter the cash-back amount and the rate available with cash back.
- Enter the promotional low APR the manufacturer offers instead.
Example
On a $35,000 car for 5 years: $2,500 cash back at 7.5% gives a $652 payment; 1.9% financing gives a $612 payment — low interest wins in this scenario.
Frequently asked questions
Which offer is usually better?
Low APR usually wins for buyers who keep the car for the full loan term. Cash back is stronger when the loan term is short or when you plan to pay off early.
Can I combine cash back with low APR?
Almost never. Manufacturers force a choice between rebate and subsidized rate.
Does the cash rebate reduce sales tax?
It depends on the state. In most, sales tax is charged on the pre-rebate price. Check local rules before assuming the tax savings.
Disclaimer: This calculator is for informational and educational purposes only and does not constitute financial, tax, or legal advice. Consult a qualified professional for decisions specific to your situation.