How to use this calculator
- Enter or choose purchase price.
- Enter or choose down payment.
- Enter or choose loan term.
- Enter or choose cash back (rebate) offered.
- Enter or choose interest rate if you take the rebate.
- The you save with the better offer updates as you type. Use Copy result or Share to keep it.
Method
Payment = L × i × (1 + i)^n ÷ ((1 + i)^n − 1); Total cost = Down payment + Payment × n. Rebate loan L = Price − Down − Rebate; low-rate loan L = Price − Down
- L
- amount borrowed
- i
- monthly rate = annual rate ÷ 12
- n
- number of monthly payments
Worked example
- With the rebate you borrow 35,000 − 5,000 − 3,000 = $27,000 at 6% for 60 months: $521.99 a month.
- With the low rate you borrow $30,000 at 1.9% for 60 months: $524.52 a month.
- Total cost: 5,000 + 60 payments ≈ $36,319.14 with cash back versus ≈ $36,471.29 with the low rate.
Here the $3,000 rebate wins by about $152 over the life of the loan, though the two are close.
What the result means
A big rebate and a short loan favour the cash back; a long loan and a large gap between the two rates favour the low rate. If you would pay cash anyway, the rebate is pure saving.
Assumptions and limits
- Payments are monthly at a fixed rate, and the rebate is applied to reduce the amount borrowed.
- Sales tax, registration and other fees are the same under both offers and are left out.
- It compares nominal totals and does not discount future payments.
- Promotional rates usually require top-tier credit; check that you qualify before comparing.
Questions
What if I would pay cash?
Then take the rebate: with no loan, a low interest rate is worth nothing to you.
Should I take the rebate and pay the loan off early?
Paying early cuts the interest on the higher-rate rebate loan, which tilts the comparison further toward the cash back.
Please note: This calculator gives estimates for planning. It is not financial advice, and lenders’ actual terms, fees and rounding may differ.