Dealer Financing vs. Credit Union Financing Calculator

Buying a car can present a financing challenge: whether to take a rebate that's available with dealer financing, or get an auto loan through a credit union or other lender that's offering a lower rate. Which is the better deal? This Dealer Financing vs. Credit Union Financing Calculator is designed to help you sort that out. It will take into account the price you paid, taxes the competing interest rates, the rebate you get with a dealer loan, the down payment and trade in, and will crunch all the numbers to let you see which is the better deal.

By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.

Auto Rebate vs. Low Interest Financing

*This entry is Required. indicates required.

Auto financing:

Press spacebar to hide inputs

Total price (before tax):*This entry is Required.Enter an amount between $100 and $250,000

Term in months:*This entry is Required.Enter an amount between 12 and 120

Sales tax rate:*This entry is Required.Enter an amount between 0% and 30%

Low interest financing:*This entry is Required.Enter an amount between 0% and 25%

Traditional financing:*This entry is Required.Enter an amount between 0% and 25%

Manufacturer rebate:*This entry is Required.Enter an amount between $0 and $20,000

Rebate payment:

$377 monthly

Low interest payment:

$398 monthly

Down payment:
Cash down: $1,500, Trade allowance: $5,000, Amount owed on trade: $4,000

Press spacebar to show inputs

Manufacturer rebate could save you $1,019 in total payments Column Graph: Please view the report to see detailed calculation results in tabular form.

Manufacturer rebate could save you $1,019 in total payments.

press spacebar to hide graph

Get your Rates!

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.

Traditional financing

The interest rate you may be able to receive from a 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.

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.

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 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.

Dealer Financing vs. Credit Union Financing Overview

Auto sales are a highly competitive business. To compete, car dealers have come up with a lot of ways to play around with the numbers to get your attention and give impression you're getting a great deal. But are you?

One of the popular tools for selling cars is rebates, a discount off the price of a car. Sometimes, these are offered by the manufacturer and are available to anyone buying a particular vehicle. Other times, though, a rebate is tied to dealer financing – you only get the rebate if you finance the purchase through the dealer. And the interest rate on a dealer loan may be higher than what you'd pay if you financed the purchase through a credit union or other lender. So… are you saving money or not with the rebate?

This calculator is specifically designed to provide an easy answer that question. It takes what you're actually paying for the vehicle, trade ins, down payment and tax included, and does an apples-to-apples comparison to show which option will give you the lowest payments – outside financing at a low rate, or dealer financing with a rebate.

You'll not only be able to compare monthly payments for loans of equal length, but the calculator will also show you the difference in your total cost between the two options over the length of the loans. You'll also be able to see the difference in interest you'd pay on one loan vs. the other.

Using the Dealer Financing vs. Credit Union Calculator

Enter the information for the car purchase and the two loan options in the boxes in the calculator. If you have questions about any particular box, click on the title to pop up a more detailed explanation. Note that you can adjust the entries for the various boxes by using the sliding green triangles.

Use "low interest financing" to enter the interest rate charged by the credit union or other alternative lender. Use "traditional financing" to enter the interest rate charged by the dealer in connection with the rebate.

Enter the sales tax rate charged in the state where you are purchasing the vehicle, the amount of the rebate and the length of the loan. The calculator will determine the monthly payments on both loans and display them in the fields labeled "rebate payment" and "low interest payment."

For a more detailed breakdown of the loan options, click the "View Report" button at the top of the page.

Other Mortgage and Financial Calculators

In addition to the standard mortgage calculator, this page lets you access more than 100 other financial calculators covering a broad variety of situations. Choose from calculators covering various aspects of mortgages, auto loans, investments, student loans, taxes, retirement planning and more.

Mortgage Calculators