<prompt> Human: Im considering purchasing a new VW GTI and have been given two different offers from the same dealership for the same car:Offer 1. Price: 25,288. Find my own financing or pay in cash. Local credit union offers 1.49 for a 36 month loan.Offer 2. Price: 26,688. VW Finance promotional loan at .9 interest for 72 months. I make 65k and have roughly 1500 leftover every month so monthly payments isnt a problem. I have 20k in cash and 20k in student loans at 5.6 fixed but can refinance to 3.4 fixed.My plan is to use the cash to pay off my student loans first, then make minimum payments on the car loan while putting any leftover monthly income into investments. Assume Ill have already maxed retirement matching and have a decent emergency fund built up.Is paying the additional 1,400 worth it to obtain the lower rate and longer-term loan?I know theres a way to calculate this using an assumed rate of return on the additional money I can invest instead of paying off the loan earlier but Im having trouble figuring out the equation or what I should use as an assumed ROI on investments. Halp?  <response>: 26 to 27K is a bit much to have invested with your income, that is 38 of what you make. A wiser choice would be to get yourself a beater.To answer your question, total interest of the life of the loan:Offer 1: 585.09 - 25288 585.09 25,873.09Offer 2: 737.07 - 26688 737.07 27,425.07Difference of: 1551.98 or 151.98 more in interest, offer 2 is more expensive.Monthly payments:Offer 1: 718.70Offer 2: 380.90Source: I know it say mortgage, but its pretty much the same slightly different methods of interest calculation...monthly vs dailyHere is a auto-loan focused calculator:I then ran the following model:Take offer 2, save the 337.80 per month difference between offer 1 and 2 for the term of the loan. I used 1.15 for the interest rate as that the current interest rate at Ally and some other banks offering high-interest savings. If you invested the difference you may earn a higher rate of return.That works out to about 871 in interest, running some more numbers, you would need about a 2.03 rate of return just to break even. 