This calculator compares taking a manufacturer's rebate with taking advantage
of low interest rate financing. The rebate will reduce your beginning loan
balance, while the low interest rate financing will lower your payment.
Assuming equal cash down and loan term, the option with the lowest payment is
the best option.
In addition, this calculator
will compare paying cash with the two financing options. Assuming that you
have the cash available to pay for the entire vehicle upfront, the calculator will
give you the break-even point between paying cash and taking a finance option.
If you can earn a higher rate of return on your cash than the break-even point,
you are better off financing the vehicle and investing your cash. If you
expect to earn a lower rate of return on your cash than the break-even point,
you are better off paying cash for the vehicle.