Car buyers are often faced with the difficult question: Which is better? The manufacturer’s rebate or low financing?
Rebates and discounts are often applied directly to the sales price before taxes, which reduces the total financed amount.
Choosing the best option
To make a well-informed decision, you have to calculate the total due when the loan comes due for both scenarios. Are the total monthly payments at the promotional rate lower than the total payments after rebate but at a slightly higher rate? The difference could be significant since the loan is spread over a few years.
Scenario 1: rebate
This scenario includes the vehicle price and the manufacturer’s or dealer’s rebate or discount.
Don’t forget to include other useful information, like taxes, the financing rate, the loan term and the down payment.
Scenario 2: low promotional rate
Create a second scenario but change the interest rate to the promotional rate offered (e.g., 0% or 1.99%), and remove the rebate.
Then just compare the results. You may be surprised—quite often the rebate is the better option!
Use the calculator to find the best option for you.
Example with a $4,000 rebate or a 0% interest rate
|New, midsize minivan
|Purchase price (before taxes)
|Discount or rebate (before taxes)
|Financed amount (before taxes)
|Total amount financed, after taxes
|Total payments at maturity
|Savings over life of the loan, with rebate
Did you know?
A Desjardins Auto and Leisure Vehicle Loan has excellent rates which, paired with a rebate, can significantly decrease the total price of your vehicle and it comes with an exclusive discount on auto insurance.
Talk to your dealer and let them know that you want to finance your vehicle with a Desjardins Auto and Leisure Vehicle Loan.
Learn more about auto and other vehicle loans.