Showing an example: a $180,000 car in Virginia with 20 percent down. Change anything below and the numbers follow.
The APR field opens on 7.14%, the Federal Reserve’s most recent commercial-bank rate on a 60-month new-car loan. The return field opens on 0.38%, the FDIC’s national average savings rate for August 2026. That average includes every branch bank paying close to nothing; a high-yield account pays several times it, and an index fund is a different conversation with different risk. Put in the figure you can actually get.
7.14%
What the $151,470 you keep has to earn a year for financing to come out level with paying cash. It is the APR, and that is not a coincidence: it is what an APR means.
The two paths
| Pay cash | Finance | |
|---|---|---|
| Handed over today | $187,470 | $36,000 |
| Kept in your account | $0 | $151,470 |
| A month, for 60 months | $0 | $3,009 |
| Interest over the term | $0 | $29,088 |
| Sales tax | $7,470, rolled into the loan | |
If the money you keep earns 0.38%
Take the $151,470 you did not hand over, let it earn 0.38% a year, and pay every one of the 60 payments out of it.
| Left after the last payment | short by $27,880 |
|---|---|
| Or, left untouched, it earns | $2,905 over the term, against $29,088 of interest |
At that return, financing costs you $27,880 more than paying cash would have, over the life of the loan. That is the price of keeping $151,470 available. It can be worth paying, if that money is your reserve, or if it is committed somewhere earning more than the loan costs, or if losing access to it would leave you worse off than the interest does. It is not free, and this page is not going to tell you it is.
Sales tax is the same on both paths
Virginia charges it either way. Rolling it into the loan changes what you hand over today and what you finance, not what the state gets.
Where every number came from
- Loan rate · Federal Reserve Bank of St. Louis (FRED), commercial-bank rate on 60-month new-car loans, national. Used-car and subprime rates run higher.
- Savings rate · FDIC (via FRED), National Rate: Savings, August 2026, checked Sept. 9, 2026. National Rate: Savings. FDIC national deposit rate, republished by FRED; latest monthly observation in the CSV download. A NATIONAL AVERAGE across all insured institutions, so it includes every branch bank paying close to nothing. A high-yield account pays several times this figure, and any comparison against a loan rate should say so.
- Sales tax · Virginia Department of Motor Vehicles, Motor Vehicle Sales and Use Tax, VA, checked Sept. 2, 2026.
Returns are pre-tax. Interest earned in a taxable account is taxed and loan interest on a car is not deductible, so the real hurdle sits a little above the figure shown. Depreciation is left out on purpose: the car loses the same value whichever way you paid for it.