Car Loan vs Cash Calculator

Compare paying cash for a car vs financing with a loan.

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Cash vs Loan

Enter the car price, your cash available, and loan terms.

Better option
Cash saves $0
Net worth after 5 years comparison
Loan monthly payment
$0
Total loan interest
$0
Cash scenario: invested cash value
$0
Loan scenario: net worth
$0
Cash scenario: net worth
$0
Difference
$0

Worked example

With the default inputs shown below, this calculator returns the following results:

InputValue
Car purchase price ($)$35,000
Cash available ($)$35,000
Loan interest rate (%)6.5%
Loan term (months)60 months
Investment return if investing cash (%)7%
ResultValue
Better optionCash saves $34,697
Loan monthly payment$685
Total loan interest$6,089
Cash scenario: invested cash value$49,617
Loan scenario: net worth$14,617
Cash scenario: net worth$49,314

Values shown are produced by this page in your browser; change any input to update them.

How to use the Cash vs Loan

  1. Car purchase price ($) — default $35,000
  2. Cash available ($) — default $35,000
  3. Loan interest rate (%) — default 6.5%
  4. Loan term (months) — default 60 months
  5. Investment return if investing cash (%) — default 7%
  6. Press Calculate to update the results instantly.

Frequently asked questions

Compare the loan rate with what the cash would otherwise earn. If the loan is 7% and your savings earn 4%, paying cash wins.
Often yes. Dealers earn a reserve on finance, so ask for the cash price and expect it to be lower than the financed price for the same car.
Never spend your emergency fund on a car. Keep three to six months of expenses in cash and finance the rest if needed.

Sources & references