Use this calculator to help you determine whether you should
take advantage of low interest financing or a manufacturer rebate.
A rebate will reduce your auto loan balance, while low interest
financing lowers your monthly payment. The best option depends
on the price of the vehicle, the size of the rebate and the interest
rates available for financing.
Definitions
Total purchase price (before tax)
This is the total cost of your auto purchase.
Include the cost of the vehicle, any additional options and any destination
charges. Don't include sales tax in this amount. Sales tax will be calculated
for you and included in your total after tax price.
Term in months
Number of months for your auto loan.
Cash down
Total amount of cash used in this purchase. The larger your cash
down payment the smaller the loan you will need to finance this purchase.
Trade allowance
The total amount that you are given for any automobile that
you trade-in as part of this purchase. In some states a trade-in can also
reduce the amount of sales tax you will owe. See the definition for "Sales
tax deduction for trade-in" for more information on trade-in vehicles
and sales tax.
Amount owed on trade
Total loan balance still outstanding on the trade-in.
Sales tax rate
Sales tax percentage rate charged on this purchase.
Low interest financing
The incentive interest rate you may be able to receive
from an auto manufacturer. These rates are usually significantly below standard
auto loan interest rates. Low interest financing can be as little as 0%
per year. Most manufacturers allow you to choose either low interest financing
or a manufacturer rebate, but not both. This calculator assumes that if
you choose low interest financing you are not eligible for any manufacturer
rebate.
Manufacturer rebate
A cash rebate paid by the auto manufacturer to you when
you purchase a new vehicle. Most manufacturers allow you to choose either
low interest financing or a manufacturer rebate, but not both.
Traditional financing
The interest rate you may be able to receive from
an bank, credit union or other lender. This is usually a higher interest
rate than the manufacturer's low interest financing, but is often very competitive
when used in combination with a manufacturer rebate. This calculator assumes
that if you choose a manufacturer rebate you are not eligible for manufacturer
low interest financing.
No sales tax deduction for trade-in
If you live in a state where your sales
tax is calculated on your full purchase price check this box. If this box
is unchecked sales tax is calculated on the purchase price less trade-in.
Currently California, the District of Columbia, Hawaii, Maryland and Michigan
allow no deductions for trade-ins when calculating sales tax. In addition,
Alaska, Delaware, Montana, New Hampshire, and Oregon have no sales tax on
autos.
Calculate sales tax before rebate
Some states will calculate sales tax on
your purchase price before a manufacturer's rebate is applied. If your state
calculates sales tax on the vehicle price before the rebate is applied,
check this box.
Information and interactive calculators are made available to you as self-help
tools for your independent use and are not intended to provide investment
advice. We can not and do not guarantee their applicability or accuracy
in regards to your individual circumstances. All examples are hypothetical
and are for illustrative purposes. We encourage you to seek personalized
advice from qualified professionals regarding all personal finance issues.
