If I take the rebate, its a combine total of 8K off the MSRP. Its also 8.5% for 72 months.

1.9% and its 4500 off the sticker and its for 60 months..

How do I decide whats best?

RX-8's don't exactly have great resale value. Im not sure how long I am going to have it for 3 years? 5? Lifetime is also possible... And I would like pay it off asap as well over 1-1/2 years..

besides how much in interest I would save over the life of the loan or even partial life.. what about other factors that are unique to the RX-8's value..

Help! I have to choose by this weekend!!!

 

If you can afford to buy cash, take the rebate. The real question is how much other debt you have or are you planning on having in the next few years, eg, buying a house?

 

well if you are planning on paying it off in 1-2 years, the interest rate is almost moot. take the cash, apply it to the principal and start making extra payments.

 

Generally speaking, If you plan on putting a low down payment and having a 60 month term, then the 1.9% is better. And iff you have a huge down payment and a short term, then the cash is better.

If it's somewhere in between, you'd have to give more details to see which option is better (ie size of down payment, final price, length of term)

 

Take the rebate and try to get financing from some other place. I'm sure you can get a pretty good rate on a new car.

 

If you do the math, you will see that the lower percentage rate will save you almost exactly $3500.

How much was the rebate again?




6 to 1
half dozen to 1
Either way you go, you will be within a few bucks of the other

 

OK, so lets take a MSRP of 30K.

Option 1: With the rebates the sale price is 22K, with 8.5% for 72 months the total cost of the car is $28,160 with monthly payments of $391.

Option 2: Sales price of 25.5K after rebate, with 1.9% for 60 months the total cost of the car is $26,750 with a monthly payment of $445.84.

So, for the life of each loan option two is better. Now if your planning on paying it off in 1.5 years thing change.

Option 1: With the rebates the sale price is 22K, with 8.5% for 18 months the total cost of the car is $23,510 with monthly payments of $1,306.

Option 2: With the rebates the sale price is 25.5K, with 1.9% for 18 months the total cost of the car is $25,885 with monthly payments of $1,438.

So, if plan to pay the car off in 1.5 years option 1 is by far your best bet. Keep in mind these calculations don't include downpayment or sales tax.

Good Luck

 

Know what your credit score is. The agency finance manager may "fib" and say you don't qualify for the low interest rate loan and try to steer you to a higher rate loan at a local bank that they get a kickback from. Mine did. I went in pre-qualified by my credit union. It made a great negotiating point. Also, if you take the rebate, they may not be as willing to deal on the price of the car. They are "giving" you this money after all.
The finance manager is where a new car dealer makes money. The margins between the price they pay and what you buy it for are small.

 

listen to rgl; he knows a thing or two about car finance.

 

Actually the lower interest rate only pays off if he keeps the car the full term of the loan. If he pays it off in 1.5 years like he said he want s to the higher interest rate is better due to the added rebate.

 

ok, but what is the amount of the rebate that is eaten up by the high interest rate over 2-3 years?

Remember lower interest rate = NO rebate Its either or...

Im beginning to think it IS a wash.. sort of...

If I make payments at a lower interest rate, then way more goes to principal than interest.

 

Not necessarily--they always make you pay off the interest first and then the principal. It's a sliding scale but it's always mostly interest up front. It very much depends on whether you will actually pay off the loan early--they're banking you won't--and what your larger credit situation is.

 

what rate are they offering you if take the rebate?

 

What you need to look at is what the car ends up costing after principle and interest. I gave you the scenario for either going the full term of the loan with both rebate and no rebate compared to paying the car off in 18 months using the same #'s, which is what explained in your first post. As I said before if you go the full term of the loan don't take the rebates, but if you decide to pay extra and have it paid off in 18 months take the rebates.

He mentioned 8.5% for 72 months in the first post.

 

If you plan on paying it off soon. I agree take the 8k off and get your finacing from a differant place for 5.9%

 

Car Loans don't ammortize like this. The ammortization schedule is defined the day you purchase the car, it doesn't matter how quickly you pay off the car. That does not mean that you are stuck paying all 6 years of interest, btu it does mean that you pay interest AS IF you are paying for 6 years. As you pay additional principle, the interest involved in your payments are cancelled from the back of the laon forward. THUS you are stuck paying the frontloaded interest.

Comparing 60 and 72 months gets confusing. If you plan on keeping it less then three years you are ALMOST CERTAINLY better off taking the rebate. If you plan on keepign it longer, you are better off comparing 60 vs 60 and then moving on from there. If 60 months at a real bank rate has a payment iwthin $10 per month of the 1.9%, I would take the rebate. If you then want 72 month financing, make sure the rate si within a half percent or so of the 60 month rate. If with the rebate yoru payment is lower and the 72 month rate is a whole percent higher you are liekly still fine.
The reason I suggest takign the rebate in most instances(even in instances where the total of payments may be higher) is that you owe less on the car during your ownership cycle. If you total or trade your car near the beginnign due to unforseen circumstances you are in much better shape. Additionally, it beneifits you more to pay additional principle on a higher rate car note.

 

4500 off the sticker, without a rebate? Where are you shopping?

 

why would anyone take a 72 month loan (that's SIX YEARS!!!) on a car is beyond me.

what about another 60 month loan on top of the $3500 rebate.

 

They can't afford it so they stretch out payments

 

zero percent interest