Car Rebate vs. Financing Comparison Calculator


Car Rebate vs. Financing Comparison Calculator

This calculator figures which auto dealer incentive is the best value - rebate or special financing.

Special interest rate:
Regular interest rate:
Cash rebate amount:
Your savings interest rate:
Car purchase price:
Down payment amount:
Loan term (months):
Your combined state and federal tax rate:
Rebate will be:

Rebate Vs. Special Dealer Financing

Buying a car whether used or new is a very exciting experience but it involves a lot of decision-making process for an individual. You have to decide which car to buy, finding out the best deal, what financing method to take and to add to the mix, you have to choose whether to take rebate or special financing incentive.

In purchasing a car, dealers offer two incentives: Rebates and special financing. Only very few dealers offer a combined incentive in a single purchase. A rebate is an amount of money that will be returned to you immediately after purchasing a car or any other product. For a rebate offer, the price of the product will not be lowered but they will return a portion of your purchase money. There is no eligibility or restrictions for this type of incentive. Whereas for special financing which is sometimes called zero financing, the financing company gives a special interest discount to qualified customers. Whatever incentive you want take; our ultimate aim is to find the best deal that gives us the best value for our money. If you are confused on what incentive to take, use the rebate vs. financing comparison calculator and find out which option saves you money.

Which Is Better?

Making a decision between rebates and special financing is sometimes very confusing. This process involves a lot of number crunching. The smartest choice is picking the best incentive that saves you a lot of money. Before you calculate, let’s take a look of the other factors that you need to consider before making a decision.

  • Check if you qualify for zero financing rates. If you have a good credit history, you will likely qualify for the special financing rates. On the other hand, there are only certain types of vehicles that will qualify for the financing incentive.
  • If you don’t qualify for a zero-interest financing, you don’t have any other choice but to take the rebate. Special interest outweighs rebate if the interest is considerably low throughout the loan term. Some financing companies will offer low financing for the first six months of your loan term and after that they will charge high interest rate until the end of the period. If this is the case, a rebate will be a good choice.
  • Shop around for the best deal. Compare and calculate the offers from different dealers.
  • Check with your dealer how long they will give you the rebate. The average waiting period is between 6-8 weeks. Some dealers will return your money after six months. Include in your calculation the amount of money lost if the waiting period is longer.
  • Think how long do you plan to keep your car. If you plan to keep your car for a longer period, then a special financing will be the best choice since you will be enjoying the low interest for a longer period of time. If you plan to keep your car on a shorter period, the rebate might be a better way to choose.

Getting The Best Deal

It is very confusing which incentive to choose if you qualify for both rebates and special financing. Do not take into account the incentives when closing the deal. Remember, you must close the deal first before deciding whether to take rebate or special financing to get the most of your money. A rebate is an incentive from the manufacturer and not from the dealer so you should not mix both during the negotiation. Weigh all your options first and decide what is truly the best option for you and your family. Find out which option gives the best value for you money using the rebates vs. financing comparison calculator.

Rebates Vs. Financing Comparison Calculator

  • Special Interest Rate – The incentive interest rate offered by the car manufacturer
  • Regular Interest Rate – The interest rate offered for a normal auto loan
  • Cash Rebate – The amount of money that will be returned by the manufacturer after the purchase
  • Savings Interest Rate – The percentage rate earned for invested money
  • Car Purchase Price – The final price of the vehicle that you negotiated with the dealer
  • Down Payment – The initial amount of money paid for a credit purchase
  • Loan term – The duration of your loan

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