Auto Rebate vs. Low Interest Financing

Use this calculator to help you determine whether you should take advantage of low interest financing or a manufacturer rebate. A rebate will reduce your auto loan balance, while low interest financing lowers your monthly payment. The best option depends on the price of the vehicle, the size of the rebate and the interest rates available for financing.

MSG_RESULTS

Choosing the manufacturer rebate of MANUFACTURER_REBATE1 results in a loan of LOAN_AMOUNT1 with a monthly payment of MONTHLY_PAYMENT1. A low interest incentive loan at INTEREST_RATE2 results in a loan of LOAN_AMOUNT2 with a monthly payment of MONTHLY_PAYMENT2. The total of all of your payments*** would be TOTAL_OF_PAYMENTS1 for the manufacturer rebate option and TOTAL_OF_PAYMENTS2 for the low interest incentive option.

**GRAPH**

 INTEREST_RATE2 Low Interest
Financing
MANUFACTURER_REBATE1 Manufacturer
Rebate
Interest rate:INTEREST_RATE2INTEREST_RATE1
Term in months:TERMTERM
Total purchase price (before tax):AUTO_SALE_PRICEAUTO_SALE_PRICE
Manufacturer rebate:MANUFACTURER_REBATE2MANUFACTURER_REBATE1
Price after rebate:AUTO_AFREBATE_PRICE2AUTO_AFREBATE_PRICE1
Sales tax*:SALES_TAX2SALES_TAX1
Total sales price (after tax):TOTAL_SALE_PRICE2TOTAL_SALE_PRICE1
Total down payment**:TOTAL_DOWN2TOTAL_DOWN1
Loan amount:LOAN_AMOUNT2LOAN_AMOUNT1
Monthly payment:MONTHLY_PAYMENT2MONTHLY_PAYMENT1
Total payments***:TOTAL_OF_PAYMENTS2TOTAL_OF_PAYMENTS1
Total interest paid***:INTEREST_PAID2INTEREST_PAID1

*MSG_CHECK_TAX_LESS_TRADE Currently California, the District of Columbia, Hawaii, Maryland and Michigan allow no deductions for trade-ins when calculating sales tax. If you live in one of these states make sure to check the box "No sales tax deduction for trade-in" on the main calculator page.

**Your total down payment is calculated as your cash down payment of CASH_DOWN plus your trade-in allowance of TRADE_ALLOWANCE minus the AMOUNT_OWED_ON_TRADE loan balance outstanding on your trade-in vehicle.

***This assumes that you do not refinance your loan and that all payments are made on time with no prepayments of the loan.

Payment Schedule

**REPEATING GROUP**

Auto Rebate vs. Low Interest Financing Definitions

Total purchase price (before tax)
This is the total cost of your auto purchase. Include the cost of the vehicle, any additional options and any destination charges. Don't include sales tax in this amount. Sales tax will be calculated for you and included in your total after-tax price.
Term in months
Number of months for your auto loan.
Cash down
Total amount of cash used in this purchase. The larger your cash down payment the smaller the loan you will need to finance this purchase.
Trade allowance
The total amount that you are given for any automobile that you trade-in as part of this purchase. In some states a trade-in can also reduce the amount of sales tax you will owe. See the definition for 'Sales tax deduction for trade-in' for more information on trade-in vehicles and sales tax.
Amount owed on trade
Total loan balance still outstanding on the trade-in.
Sales tax rate
Sales tax percentage rate charged on this purchase.
Traditional financing
The interest rate you may be able to receive from a bank, credit union or other lender. This is usually a higher interest rate than the manufacturer's low interest financing, but is often very competitive when used in combination with a manufacturer rebate. This calculator assumes that if you choose a manufacturer rebate you are not eligible for manufacturer low interest financing.
Low interest financing
The incentive interest rate you may be able to receive from an auto manufacturer. These rates are usually significantly below standard auto loan interest rates. Low interest financing can be as little as 0% per year. Most manufacturers allow you to choose either low interest financing or a manufacturer rebate, but not both. This calculator assumes that if you choose low interest financing you are not eligible for any manufacturer rebate.
Manufacturer rebate
A cash rebate paid by the auto manufacturer to you when you purchase a new vehicle. Most manufacturers allow you to choose either low interest financing or a manufacturer rebate, but not both.
No sales tax deduction for trade-in
If you live in a state where your sales tax is calculated on your full purchase price check this box. If this box is unchecked sales tax is calculated on the purchase price less trade-in. Currently California, the District of Columbia, Hawaii, Maryland and Michigan allow no deductions for trade-ins when calculating sales tax. In addition, Alaska, Delaware, Montana, New Hampshire, and Oregon have no sales tax on autos.
Calculate sales tax before rebate
Some states will calculate sales tax on your purchase price before a manufacturer's rebate is applied. If your state calculates sales tax on the vehicle price before the rebate is applied, check this box.


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