1. What is the Auto Loan Rebate Calculator?

The Auto Loan Rebate Calculator helps determine your monthly payment when you receive a rebate on your auto purchase. It accounts for how the rebate reduces your effective loan amount.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula adjusted for rebates:

Where:

• \( PMT \) — Monthly payment
• \( P \) — Original loan amount
• \( \text{rebate} \) — Amount of rebate
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Number of monthly payments

Explanation: The rebate reduces your effective loan amount, which then lowers your monthly payments while keeping the same interest rate and term.

3. Importance of Loan Payment Calculation

Details: Understanding how rebates affect your monthly payment helps you make informed decisions when comparing financing options between low-interest loans and cash rebates.

4. Using the Calculator

Tips: Enter the total loan amount before rebate, the rebate amount, annual interest rate (as a percentage), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Should I take the rebate or low-interest financing?
A: This depends on the rebate amount, interest rate difference, and loan term. Use this calculator to compare both options.

Q2: How does a rebate differ from a down payment?
A: A rebate reduces the purchase price before financing, while a down payment comes from your own funds after the price is set.

Q3: Are rebates taxable?
A: Typically no, rebates are considered price reductions rather than income.

Q4: Can I combine rebates with special financing?
A: Usually not - most manufacturers require choosing either the rebate or special financing.

Q5: What's better - a larger rebate or lower interest rate?
A: It depends on the amounts and loan term. Use this calculator to compare the actual monthly payments.