Automakers often make you choose: 0% financing or cash back. Enter both offers and your own loan rate to see which deal costs less in total.
Estimates for planning, not financial, tax or legal advice. Figures use US rules unless the page says otherwise.
Why you usually have to choose
Manufacturer deals often come as either/or: special low-rate financing through the automaker's lender, or a cash rebate that lowers the price if you finance elsewhere or pay cash. The FTC notes that low-rate programs may come with conditions such as a strong credit rating or a larger down payment, and warns not to assume a rebate is already in the price you're quoted. Get both offers in writing.
How it's calculated
Amount financed = price − rebate + sales tax − down payment
Payment = A × i ÷ (1 − (1 + i)−n), or A ÷ n at 0%
Total paid = down payment + payment × n
The break-even rate is the outside APR at which the rebate deal's payments add up to exactly the same as the 0% deal's. Below it, take the rebate; above it, take 0%. The calculator finds it by bisection to a tiny fraction of a percent.
Worked example
A $35,000 car, $5,000 down, 7% tax on the price before the rebate. Offer one: 0% for 60 months. Offer two: $3,000 cash back, with a 6% loan from your credit union for 60 months.
- 0%: financed $35,000 + $2,450 − $5,000 = $32,450, so $540.83 a month and $37,450 in total.
- Rebate: financed $29,450 at 6%, so $569.35 a month and $39,161.06 in total.
The 0% deal saves $1,711.06. The break-even outside rate is about 3.88%: if you could borrow below that, the rebate would win.
Things the comparison leaves out
- 0% offers are often limited to shorter terms or certain models. Compare the same car.
- Whether a rebate lowers the taxed price depends on your state. Pick the option that matches yours.
- If you'd pay cash, the rebate is free money, but you also give up what that cash could earn.
- Dealer add-ons, doc fees and title fees are the same either way, so they're left out. Make sure they really are the same in both offers.
Sources
How we checked this
Before every update, this calculator is run in a real browser with these known answers, and it must match all of them:
- $35,000 car, $5,000 down, 7% tax: 0% for 60 months beats a $3,000 rebate at 6% by $1,711.06 ✓
- Same: break-even outside rate 3.88% ✓
- At 3% outside, the rebate wins by $699.32 ✓
- Tax on the price after the rebate: 0% wins by $1,467.47 ✓
- Rebate as big as the price is rejected ✓
Last checked October 26, 2026. Spotted something wrong? The math is done in your browser with the formula shown on this page, so you can check any result by hand.
Questions people ask
Is 0% APR or the cash rebate better?
It depends on the rebate size, the term and the rate you can get elsewhere. A big rebate and a low outside rate favor the rebate. The break-even rate above tells you the outside APR where they tie.
Who qualifies for 0% financing?
Usually buyers with strong credit, according to the FTC, and the offer may require a larger down payment or a shorter term. Ask the dealer for the conditions in writing.
Can I get 0% APR and the rebate?
Sometimes, but often the offers are either/or. Ask whether the rebate is already included in the price you're quoted; the FTC warns not to assume it is.
Is the rebate taxed?
It depends on the state. In some states sales tax is charged on the price before the rebate; in others on the price after it. Choose the matching option above.
Are 0% APR car deals real?
Yes. The automaker's finance company is giving up interest to move cars, which is why the deal often replaces the cash rebate instead of adding to it.