You have only saved 2,000. You are going to trade in your old car and get a new one. The dealership has offered you 3,000 for your trade, and you have accepted their offer. The car you want to buy costs 23,000 but you talked them down to 21,000. The dealership is offering you the following offer 0 percent financing or 4,000 cash back. If you choose the cash back, use the 4,000 to lower the amount you will finance. The interest rate on a 5 year car loan is 8 percent. Which is a better deal the 0 percent or the cash back, and by how much?
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