Dealers offer two choices: cashback/rebate + market rate, or low promo rate (even 0%) with no cashback. This tool computes the total cost of both so the comparison is apples to apples.
How much cashback makes option A exactly match option B's total cost? Enter the numbers and the tool solves the formula directly (no trial-and-error iteration).
See the winner for each rebate × market-rate combination. Green = option A (cashback) wins, blue = option B (promo) wins.
A 0% promo rate is often available only for short terms (e.g. 36 months), while cashback can be used with 60–72 month terms. The 36-month payment is of course larger per month, but its total interest is small. Always compare using the separate term fields in the Comparator tab, or equalize the terms first.
A long term lowers the monthly payment but adds total interest. The benchmark is always total cost, not the monthly payment.
Promo rates often require a certain credit score, a minimum down payment, or specific models and terms. Make sure the numbers you enter are numbers you can actually get, not brochure numbers.
Insurance, admin fees, and taxes are not counted here. This comparison assumes other costs are equal for both options.
This tool compares two auto-financing offers: option A, a dealer cashback or rebate that reduces the loan principal but uses the market interest rate, and option B, a low or 0% promo rate with no cashback. Both are computed down to total cost so the results can be compared directly.
The monthly payment is computed with the standard amortization formula: PMT = P × r / (1 − (1 + r)^−n), where P is the loan principal, r is the monthly rate (annual rate divided by 12), and n is the number of months in the term. Total cost = payment × term + down payment.
Example: price $30,000, rebate $2,500 at a 6% market rate for 60 months, versus the full $30,000 price at a 0.9% promo rate for 60 months with $0 down. Option A (cashback): loan principal $27,500, payment $531.65 per month, total cost $31,899.12. Option B (promo rate): loan principal $30,000, payment $511.52 per month, total cost $30,691.31. Option B costs $1,207.81 less overall.
The break-even rebate is the cashback amount that makes option A's total cost exactly equal to option B's total cost. In the example of a $30,000 price at a 6% market rate versus a 0.9% promo rate for 60 months with $0 down, the break-even rebate is about $3,541.25. A rebate above that makes the cashback option cheaper overall.
The four most common: mismatched terms because promo rates are often only for short terms, small monthly payments that turn out expensive overall due to a long term, promo conditions such as credit score or minimum down payment that keep brochure numbers out of everyone's reach, and costs outside the loan such as insurance and admin fees that are not included in this calculation.
No. The results are an educational estimate based on the standard amortization formula and the inputs you enter, not financial advice. Financing decisions should consider your personal financial situation and the lender's official terms.
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