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What they said · Car loans

“Zero percent, or $3,000 cash back.”

A $40,000 car. Take the $3,000 and you finance $37,000 at the bank's 7.14% over 60 months. Take 0% and you finance the full $40,000.

How much interest do you pay on the $37,000 bank loan?

$2,000
$0$10,000
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The real number

$7,105

It comes to $7,105.

Your guess—
The real figure$7,105

Against $0 at 0%. The rebate is worth $3,000; the interest it comes with costs $7,105.

Why so much?

Why

0% is worth the interest you would otherwise pay. Compare it with the rebate, not with the sticker.

Here 0% wins by $4,105: $40,000 paid in all against $44,105.

When the rebate wins

If your own rate were low enough for the interest to fall under $3,000, the rebate would be the better deal. At 7.14% it is not close.

Show me one move

One move

Get both quotes in writing, then compare the totals.

0% on $40,000

$667a month
$40,000paid in all

$3,000 off, financed at 7.14%

$735a month
$44,105paid in all

$4,105 apart over five years, for the same car.

0% offers usually need top-tier credit and sometimes a shorter term than 60 months. Check which term the 0% applies to.

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Now yours

Your rebate loan.

$735.09 a month. Interest in all: $7,105. You pay back $44,105.

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The whole story, as text

“Zero percent, or $3,000 cash back.” Which costs less?

“Zero percent, or $3,000 cash back.” A $40,000 car. Take the $3,000 and you finance $37,000 at the bank's 7.14% over 60 months. Take 0% and you finance the full $40,000. How much interest do you pay on the $37,000 bank loan?

The answer

$7,105. Against $0 at 0%. The rebate is worth $3,000; the interest it comes with costs $7,105.

Why

0% is worth the interest you would otherwise pay. Compare it with the rebate, not with the sticker. Here 0% wins by $4,105: $40,000 paid in all against $44,105. When the rebate wins: If your own rate were low enough for the interest to fall under $3,000, the rebate would be the better deal. At 7.14% it is not close.

One move

Get both quotes in writing, then compare the totals. 0% on $40,000: $667 a month, $40,000 paid in all. $3,000 off, financed at 7.14%: $735 a month, $44,105 paid in all. $4,105 apart over five years, for the same car. 0% offers usually need top-tier credit and sometimes a shorter term than 60 months. Check which term the 0% applies to.

The comparison tool takes both as offers and shows the cost of leaving early at months 6, 12 and 24.

Yours

Which offer really costs less? runs these numbers for any loan. Nothing you enter leaves your browser.

Written and reviewed by Riverbend Crossroads Digital LLC, Friday, October 2, 2026. Figures from the Show Real Cost engine, computed exactly and shown to the cent. Educational, not advice; your lender's disclosures are the authoritative figures. How we calculate · Corrections.