Keep the selling price constant
Compare incentives only after negotiating the vehicle price; a dealer can offset a headline benefit by changing the transaction price or add-ons.
Vehicle incentive and financing decision
Compare the rebate and subsidized APR using the entire cash flow
Model sales tax, trade payoff, fees, extra payments, payoff timing, present value, and the exact cash rebate needed to equal the low-rate offer.
Plan with context
A rebate changes principal immediately; a subsidized APR saves interest over time.
The better offer depends on the exact amount financed, tax treatment, loan term, payment behavior, opportunity cost, and whether both incentives use the same negotiated vehicle price.
Trade equity includes the payoff
A trade worth more than its loan reduces financing, while negative equity increases the new balance even when the trade allowance looks large.
Rebates may remain taxable
Some jurisdictions calculate sales tax before subtracting a manufacturer rebate, while others reduce the taxable base.
Extra payments change the contest
Accelerating both loans reduces the time during which a low APR can generate savings, potentially making the cash rebate more attractive.
Present value respects timing
Discounting future payments recognizes that a dollar paid years later is economically different from a dollar surrendered at signing.
Qualification is part of the offer
Low promotional rates often require excellent credit, limited terms, captive financing, and specific inventory or delivery dates.
Included
Negotiated price, rebate, two APRs, term, down payment, trade payoff, two rebate-tax treatments, fees, financing choice, extra payment, opportunity rate, contractual and actual payoff, present value, break-even rebate, chart, and ledger.
Not included
Credit qualification, changing dealer price, conditional incentives, insurance, maintenance, depreciation, gap exposure, balloon payments, variable rates, prepayment restrictions, or state-specific fee taxation.
Use it well
Request written out-the-door worksheets for both offers, compare the same term and price, verify rebate eligibility, and obtain an outside preapproval before visiting the finance office.