Modeled example
Compare a promotional rate against a cash discount.
Modeled example, not a real offer
A promotional low rate is often offered at full price, while paying a standard rate can come with a cash or trade discount instead. Which costs less depends on the numbers. The figures below are invented round numbers for illustration; replace them with a real quote you have received. Nothing here is an available rate, an offer, or a claim about any provider.
Swipe to compare both paths →
| Path | Price used | Annual rate | Amount financed | Monthly payment | Total interest | Total cost (with cash down) |
|---|---|---|---|---|---|---|
| Promotional rate, full price | $120,000 | 0.00% | $100,000 | $1,667 | $0 | $120,000 |
| Cash or trade discount, standard rate | $111,000 | 8.50% | $91,000 | $1,867 | $21,020 | $132,020 |
In this modeled example the promotional-rate, full-price path costs about $12,020 less in total. Change the figures to match a real quote before deciding.
Illustration only, using the figures above. Equal monthly payments are assumed and the same cash-at-signing is applied to both paths. Real decisions also depend on payment timing, fees, eligibility rules for a promotional rate, prepayment terms, and whether the discount is cash or added trade allowance. This example is not an offer, an approval, advice, or affiliated with any listed provider.
Reading the two paths
The rate and the price move together.
The promotional path finances the full price at the low rate. The discount path finances a lower price at a standard rate. Because a promotional rate usually applies only at full price, the fair comparison is not rate against rate but total cost against total cost: the interest you avoid on one path versus the price you cut on the other.
Before you rely on either path
Confirm the terms this example does not model.
Ask whether a promotional rate has purchase, term, or documentation conditions; whether the discount is cash or added trade allowance; how fees are charged; when the first payment is due; and what a prepayment or early payoff would cost. Any of these can change which path is cheaper for a specific transaction.
Modeled example questions
Use the math to frame the question for the provider.
Is this a real offer or a real rate?
No. Every figure is an invented, editable illustration. This page does not describe any provider's program, promotion, or rate, and it is not affiliated with any listed provider.
How can a 0% rate cost more than a discount?
A promotional rate is often offered at full price. If a cash or trade discount is available instead, financing the lower price at a standard rate can produce a lower total cost even though you pay interest. The example shows when each path wins.
What decides which path is cheaper?
Mainly the size of the discount you would give up versus the interest you would pay at the standard rate over the term. Larger discounts and shorter terms favor taking the discount; small discounts and long promotional terms favor the promo.
What does this example leave out?
It assumes equal monthly payments and the same cash at signing on both paths. It does not model payment timing, fees, eligibility rules for a promotional rate, prepayment terms, or whether a discount is cash or added trade allowance. Confirm those with the provider.