Decide between a manufacturer cash rebate and a subsidised low-interest offer.
Car manufacturers incentivise purchases through two mutually exclusive offers: a cash rebate (applied like an extra down payment) or a below-market interest rate on financing. Taking the rebate reduces your loan amount but leaves you paying the market rate. Taking the low-interest deal means financing a higher amount but at a subsidised rate. Which is better depends on the spread between your market rate and the subsidised rate, and the size of the rebate. Generally: larger rebates favour cash-back; very low subsidised rates (0–1%) often beat the rebate regardless of rebate size.
Monthly payment (both scenarios)
Payment = Loan amount × monthly rate / (1 − (1 + monthly rate)^−term)
The rebate wins when your market financing rate is close to the dealer's subsidised rate — the rate advantage is small, so the upfront cash reduction matters more. It also wins for very short loan terms where there's less time for the low rate to generate interest savings.
The subsidised rate wins when the rate gap is large (e.g., market rate 8% vs dealer 0%) and the loan term is long. More months at a dramatically lower rate accumulates more savings than the one-time rebate.
Early payoff reduces the advantage of a low interest rate (less time to earn savings). If you plan to pay off quickly, the rebate is more attractive. Re-run the calculation with a shorter term to simulate early payoff.
In most US states, sales tax is calculated on the full vehicle price regardless of rebate. Some states (Michigan, for example) compute tax on the after-rebate price. Toggle the 'Tax on rebated price' option to reflect your state's rules.