Is dealership financing better for me than traditional auto loan financing?

Compares taking a cash rebate with regular-rate financing against skipping the rebate for a low or zero-percent loan, and shows when the two options break even.

Purchase, Rebate and Financing Information

Sales price before rebate ?

The vehicle's negotiated price before any manufacturer or dealer rebate is applied.

Rebate amount if financing through bank or credit union ?

Cash rebate offered when you decline the dealer's special financing and pay through your own bank or credit union.

Annual interest rate ?

The rate you'll pay when financing through your own bank or credit union after taking the rebate.

Term of loan (years) ?

How many years you'll take to repay the loan.

Enter your values and select Calculate.

The break-even point tells you how long it takes for the bank loan — which starts smaller thanks to the rebate but carries interest — to catch up with a zero-percent dealer loan that skips the rebate. Before that point, the dealer option owes less; after it, the bank loan usually pulls ahead. There's no single 'right' break-even number — it depends on how long you plan to keep the vehicle and loan.

The rebate amount and the interest rate are what move this result the most. A larger rebate shrinks the bank loan's starting balance and shortens the break-even period. A higher interest rate works against you, stretching out how long it takes the bank loan to become the better deal, or removing the advantage altogether.

This calculator doesn't account for sales tax differences, loan origination fees, insurance requirements, or your own creditworthiness, all of which can shift the real cost of either option. It also assumes the rebate and the zero-percent offer are both available to you at the same time, which isn't always the case.

If you're deciding between these two paths, compare the initial difference against how many years you expect to keep the loan relative to the break-even point. It's worth rerunning this calculation if the dealer changes the rebate offer, the bank's rate moves, or you're considering a different loan term. Having run the numbers at all puts you ahead of a purely gut-feeling decision.

This information may help you analyze your financial needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. The calculations do not infer that the company assumes any fiduciary duties. The calculations provided should not be construed as financial, legal or tax advice. In addition, such information should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.