Auto Rebate vs. Low Interest Financing (Canadian)

You have two options while purchasing automobiles. One is auto purchase at a low interest financing and the other is manufacturer rebate. Low interest financing simplifies purchasing a vehicle at a lower monthly interest rate while rebate reduces the total due amount to be paid. ACalculator can support you to overcome the dilemma of which one is more appropriate for you considering the available rebate and interest related information.
Total purchase price (before tax)
The aggregate before tax cost of the vehicle including everything other than HST or GST + PST. As this is the before tax calculation, ACalculator has separate sections for the calculation of GST + PST or HST amount to be considered in after tax calculation.
Term in months
This is the number of months you will repay for the auto financing.
Cash down
The down payment made by you for the auto purchase. So, the more you pay as down payment the less financing you will require.
Trade allowance
The trade-in amount given to you for trading your old car as a payment of your current purchase.
Amount owed on trade
The outstanding loan balance for this purchase.
GST + PST or HST (%)
It’s the regional tax rate change for this purchase. This rate change is applied on the purchasing price after adjusting any rebate and trade allowance.
Traditional financing
This is the cost of financing through high interest bearing funds of bank and other lending institutions. Though this rate is high, it can be reasonable if this fund is used to purchase vehicle and qualify for manufacturer rebate. On the other hand, if you choose to use lower interest financing, you will not be allowed to get manufacturers rebate.
Low interest financing
This is the cost of financing through lower interest rate in contrast of bank funds to finance the auto purchase. This is the financing offered by the car suppliers. As the interest rate is low, you can’t avail the rebate benefit which is a reduction in the amount to be paid. So, you can choose either low interest financing without rebate or traditional financing with rebate.
Manufacturer rebate
This is a deduction in the total due amount to be paid by the auto purchaser. If you want to qualify for rebate, you will have to take loan at a higher rate from parties other than the manufacture.