Each line is the running total of everything you've paid as the months pass. The lower line is the cheaper choice; the gap at the end is what you keep.
Total interest paid
Bonus offered vs. bonus needed
The bigger your down payment, the smaller the loan — and the less the low rate can save. Past the crossover, the fixed bonus wins. Bars above zero mean the financing is cheaper; below zero, the cash is.
| Path | Financed | APR | Term | Monthly | Interest | Sales tax | Total cost |
|---|
Cash now or a cheaper loan
Manufacturers advertise two incentives on the same car: a cash bonus (money off the price) or promotional financing (a low APR). Almost always you must pick one. The bonus makes the loan smaller; the promo rate makes the loan cheaper to carry. Which saves more depends on the numbers, and this tool adds up every dollar each way.
Why the monthly payment can mislead
A longer term or a rolled-in extra can make a payment look small while the total climbs. Always compare the total cost — the sum of your down payment, any up-front tax and fees, and every monthly payment.
The break-even bonus
The break-even bonus is the cash amount that would make the two paths cost exactly the same. If the bonus on offer is bigger than break-even, take the cash; if smaller, take the rate. It turns a fuzzy choice into one number to check against.
Why the market rate decides it
The value of the promo is really the gap between the market rate and the promo rate. When market rates are high, cheap financing avoids a lot of interest, so a bonus struggles to beat it. When market rates are low, the interest you avoid is small, and even a modest bonus can win.
The smaller the loan, the more the cash is worth
The low rate's value scales with how much you borrow; the bonus is a fixed amount. So anything that shrinks the loan — a dealer discount, a larger down payment, or paying the car off early — tilts the math toward the cash, and a big enough reduction flips the answer outright.
Sales tax can take the bonus's side
In many states the bonus lowers the price the tax is figured on, so taking the cash also trims the tax — a small extra nudge toward the bonus. Some states tax the full price before rebates, where this edge disappears. Set your rate and the toggle to match your state.
Guard the finance office
After the price is set, you'll be offered extras — an extended warranty, tire-and-wheel or paint protection, GAP coverage. Rolled into the loan, each one grows the amount financed, accrues interest, and can erase the savings you fought for. Decline what you don't truly want, and price anything you do want on its own.
Key takeaway
Settle the price first, decide your down payment, and only then choose the incentive on your real numbers — then hold the line on add-ons. For a typical down payment at today's rates, the low APR usually wins; with a large down payment, an early payoff, or a small bonus, the cash can come out ahead. This page is a teaching tool, not financial advice.