★ COMPARISONS · CARS · CASH VS FINANCING
Paying cash for a $30,000 car costs $37,459.60 all-in — financing the $27,000 at 6.98% costs $35,062.66, so financing wins by $2,396.94. Compare both paths on the same car: the payment, the interest, and the growth the cash gives up. This one is the CASH-VS-FINANCING comparison at the verified average rate — 6.98% with a 5% return assumed — the cash-vs-finance-car page is the EARLIER cash-vs-finance tool — $5,000 down at 6.9% with a 7% return assumed — not this comparison; the pay-cash-vs-finance-car page is the 20%-DOWN cash-vs-finance tool — a $32,000 car with $6,400 down — not this one at 10% down on $30,000; and the car-loan-calculator page is the CAR-LOAN tool — one loan's payment on its own — not cash against financing.
A $30,000 car, $3,000 down, $27,000 at 6.98% over 60 months: the payment is $534.38 a month and the interest is $5,062.66, while the $27,000 you keep earns $7,459.60 at 5% over five years. Put your own price, rate and return in and see which one wins for you.
It means that, on the defaults, financing leaves you $2,396.94 better off after five years than paying cash — even though the loan charges $5,062.66 in interest. The payment is $534.38 a month for 60 months, which is $32,062.66 in total, plus the $3,000.00 down — $35,062.66 all-in. Paying cash costs $30,000.00 now, which looks cheaper, but it also gives up the growth on the $27,000.00 you would have kept: at 5% a year for five years that money grows by $7,459.60, so the cash path costs $37,459.60 all-in. The interest is real, but the growth it preserves is bigger — because interest is charged on a balance that shrinks every month, while the investment compounds on the full $27,000.00 for the whole five years.
The return is the whole answer. At a 5% return financing wins by $2,396.94; at the 3.50% return the two tie; at a 0% return cash wins by $5,062.66. The loan rate matters too — at 5.00% financing wins by $3,888.20 and at 9.00% it wins by only $831.07 — but the return moves the answer more, because it applies to the full $27,000.00 for five years. A return you cannot actually earn is the most expensive assumption on this page: a savings account pays what it pays, and the stock market does not promise 5%.
Longer terms flip the verdict. At 36 months financing wins by $4,455.95; at 60 months it wins by $2,396.94; at 84 months it wins by only $251.57; and at 87 months cash wins for the first time. The interest piles up with every extra month while the growth is fixed at five years, so the longer the loan, the worse financing looks. An 84-month loan is not a cheaper car — it is the same car with more interest and a smaller monthly payment.
The down payment shrinks the gap, it does not change the winner. With $0 down financing wins by $2,663.27; with $6,000 down it wins by $2,130.62; and only at the full $30,000.00 down — paying cash — do the two tie. A bigger down payment means less loan, less interest and less money kept invested, so both sides of the comparison shrink together. If cash flow is the problem, a bigger down payment is still the honest way to cut the payment — it just does not change which path wins.
On the defaults: a $30,000 car, $3,000 down, $27,000 at 6.98% over 60 months, money kept invested at 5% for 5 years.
And the other way: a loan rate of 10.0494% makes financing exactly tie cash; an investment return of 3.4969% does the same; and at 87 months cash wins for the first time.
The defaults are a $30,000 car before tax and fees, $3,000 down (10%), a $27,000 loan at 6.98% over 60 months, and the $27,000 kept invested at 5% a year for 5 years. The 6.98% is Bankrate's weekly-survey average for a 60-month new-car loan (March 2026; Bankrate senior analyst Ted Rossman expected the average to stay between 6.7% and 7% through 2026) — your rate depends on your credit score and lender, and a good score can be well below it. The 5% is a high-yield savings or certificate rate, not a stock-market return: it is the money you can earn without risking the principal. The opportunity cost uses a fixed 5-year horizon even when the loan term differs, so an 84-month loan is compared against five years of growth — the page says so plainly. The model counts the car price, the loan interest and the investment growth only: sales tax, fees, insurance, maintenance and the car's resale value are not in it, and the monthly payments are assumed to come from income, not from the invested money. Change the rate, the return and the down payment to your own numbers before you decide.
These notes repeat in every explainer section because this page is built to be read start to finish: the return is the whole answer; longer terms flip the verdict; and the down payment shrinks the gap, it does not change the winner.
| Output | Formula | What it means |
|---|---|---|
| Monthly payment | loan × amort. factor at 6.98%, 60 mo | $534.38 a month on a $27,000.00 loan. |
| Total interest | 60 payments − loan | $5,062.66 — $32,062.66 paid on a $27,000.00 loan. |
| Financing, all-in | down + all payments | $35,062.66 — $3,000.00 down plus $32,062.66. |
| Growth the cash gives up | loan × ((1.05)^5 − 1) | $7,459.60 — $27,000.00 at 5% for 5 years. |
| Cash, all-in | price + growth forgone | $37,459.60 — $30,000.00 now plus $7,459.60 of growth given up. |
| Winner (total cost) | lower all-in total wins | Financing by $2,396.94. |
| Verdict | in words | Financing wins by $2,396.94. |
| Reverse: Loan rate at which financing ties cash | step | 10.0494%: Finance $574.33/mo — $3,000 down plus 60 payments of $574.33 is $37,459.60 in total; cash costs $30,000 now and gives up $7,459.60 of growth, $37,459.60 all-in — cash wins by $0.00.. |
| Reverse: Investment return at which cash ties financing | step | 3.4969%: Finance $534.38/mo — $3,000 down plus 60 payments of $534.38 is $35,062.66 in total; cash costs $30,000 now and gives up $5,062.73 of growth, $35,062.73 all-in — financing wins by $0.07.. |
| Reverse: Loan term at which cash first wins | step | 87 months: Finance $396.35/mo — $3,000 down plus 87 payments of $396.35 is $37,482.23 in total; cash costs $30,000 now and gives up $7,459.60 of growth, $37,459.60 all-in — cash wins by $22.62.. |
| Loan at 5.00% instead of 6.98% | same model | Finance $509.52/mo — $3,000 down plus 60 payments of $509.52 is $33,571.40 in total; cash costs $30,000 now and gives up $7,459.60 of growth, $37,459.60 all-in — financing wins by $3,888.20.. |
| Loan at 9.00% instead of 6.98% | same model | Finance $560.48/mo — $3,000 down plus 60 payments of $560.48 is $36,628.54 in total; cash costs $30,000 now and gives up $7,459.60 of growth, $37,459.60 all-in — financing wins by $831.07.. |
| 84-month term instead of 60 | same model | Finance $407.24/mo — $3,000 down plus 84 payments of $407.24 is $37,208.03 in total; cash costs $30,000 now and gives up $7,459.60 of growth, $37,459.60 all-in — financing wins by $251.57.. |
| 36-month term instead of 60 | same model | Finance $833.43/mo — $3,000 down plus 36 payments of $833.43 is $33,003.65 in total; cash costs $30,000 now and gives up $7,459.60 of growth, $37,459.60 all-in — financing wins by $4,455.95.. |
| 20% down ($6,000) instead of 10% | same model | Finance $475.00/mo — $6,000 down plus 60 payments of $475.00 is $34,500.14 in total; cash costs $30,000 now and gives up $6,630.76 of growth, $36,630.76 all-in — financing wins by $2,130.62.. |
| $0 down instead of $3,000 | same model | Finance $593.75/mo — $0 down plus 60 payments of $593.75 is $35,625.17 in total; cash costs $30,000 now and gives up $8,288.45 of growth, $38,288.45 all-in — financing wins by $2,663.27.. |
| 0% APR — no interest at all | same model | Finance $450.00/mo — $3,000 down plus 60 payments of $450.00 is $30,000.00 in total; cash costs $30,000 now and gives up $7,459.60 of growth, $37,459.60 all-in — financing wins by $7,459.60.. |
| Whole price as the down payment — $30,000 | same model | Finance $0.00/mo — $30,000 down plus 60 payments of $0.00 is $30,000.00 in total; cash costs $30,000 now and gives up $0.00 of growth, $30,000.00 all-in — a tie on total cost.. |
| 0% investment return — money earns nothing | same model | Finance $534.38/mo — $3,000 down plus 60 payments of $534.38 is $35,062.66 in total; cash costs $30,000 now and gives up $0.00 of growth, $30,000.00 all-in — cash wins by $5,062.66.. |
| Loan at 20% APR | same model | Finance $715.33/mo — $3,000 down plus 60 payments of $715.33 is $45,920.09 in total; cash costs $30,000 now and gives up $7,459.60 of growth, $37,459.60 all-in — cash wins by $8,460.49.. |
Figures are the model's own totals on the numbers you type, computed to the cent from unrounded values: the payment comes from the amortization factor, the interest is the payments minus the loan, and the growth is the loan times (1 + return)^5 minus one — the displayed payment is rounded to the cent and the totals are computed from the unrounded payment. The real-world anchor is the 6.98% rate: Bankrate's weekly survey of the 10 largest banks and thrifts, March 2026, with Bankrate senior analyst Ted Rossman expecting the 60-month new-car average to stay between 6.7% and 7% through 2026. For context, Experian's Q2 2026 average new-car loan was 6.35% and the Federal Reserve's August 2026 average for 60-month new-car loans at banks was 7.54% — the average moves with credit scores and lenders, and your rate is the one in your loan agreement, not the one in a survey. The model leaves out sales tax, fees, insurance, maintenance, the car's resale value, and any tax deduction on the loan interest; it assumes the monthly payments come from income rather than from the invested money, and that the 5% return is earned for the full five years. This page is a comparison tool, not financial advice: talk to a licensed adviser before you decide how to pay for a car.
On a $30,000.00 car with $3,000.00 down, a $27,000.00 loan at 6.98% over 60 months is $534.38 a month, $5,062.66 in interest, $35,062.66 all-in. Paying cash costs $30,000.00 now and gives up $7,459.60 of growth at 5.00% for 5 years, $37,459.60 all-in — financing wins by $2,396.94. The 6.98% rate is Bankrate's weekly-survey average for a 60-month new-car loan. Source: Bright Side Kit, brightoolbox.com.
On the defaults, finance — it wins by $2,396.94 in total cost. The loan charges $5,062.66 in interest, but the $27,000.00 you keep earns $7,459.60 at 5% over five years.
6.98% for a 60-month new-car loan — Bankrate's weekly-survey average. Experian's Q2 2026 average was 6.35% and the Fed's August 2026 bank average was 7.54%; your rate depends on your credit score.
$5,062.66 over 60 months at 6.98% — $534.38 a month, $32,062.66 in total. At 5.00% the interest is $3,571.40 and at 9.00% it is $6,628.54.
Below 3.50% a year — at that return the two tie, and at 0% cash wins by $5,062.66. At 5% financing wins by $2,396.94.
It hurts the financing case: at 84 months financing wins by only $251.57, and at 87 months cash wins. The interest piles up while the five years of growth stay fixed.
10.0494% — at that rate the $35,062.66 financing total exactly equals the $37,459.60 cash total. Above it, cash wins.
On the numbers, yes — at 0% APR the payment is $450.00 a month and financing wins by the full $7,459.60. Check the price first: a 0% deal sometimes replaces a cash rebate.
Sales tax, fees, insurance, maintenance, the car's resale value, and any tax deduction on the loan interest. It also assumes the payments come from income, not from the invested money.