Cash Back or Low Interest Calculator guide
Cash Back or Low Interest Calculator: Which Deal Is Better?
Use our cash back or low interest calculator to compare a cash back offer with a low-rate finance deal and see which costs less.
By the AllCalculator editorial teamUpdated 16 October 20261 min read
Car dealers often offer a choice: money off the price, or cheap finance. Our Cash Back or Low Interest Calculator shows which saves you more.
How to use the calculator (Cash Back or Low Interest Calculator)
- Enter the price and your deposit.
- Enter the cash back amount and the APR you'd pay with it.
- Enter the low-interest APR.
- Enter the term.
How it works
- Cash back: the cash back reduces the amount you borrow, but at a higher rate.
- Low interest: you borrow the full amount at the lower rate.
The calculator compares the total paid in each case.
A worked example
With the calculator's default settings, a £25,000 car with a £3,000 deposit over 48 months:
- £2,000 cash back at 9.9%: £502.25 a month
- 2.9% finance: £485.62 a month
- The low-interest deal saves about £798
Frequently asked questions
When is cash back better?
When the cash back is large compared with the loan, the term is short, or you can get cheap finance elsewhere.
Can I take the cash back and pay cash?
If you're paying outright, cash back is almost always better.
Sources and further reading
Links open official and independent websites in a new tab.
This guide is general information to help you understand your options. It isn't financial, tax, legal or building advice and doesn't take your personal circumstances into account. Figures were checked when the guide was last updated and can change, so confirm anything important with GOV.UK, HMRC, a regulated adviser or a qualified tradesperson.