I had a friend who attempted to buy an expensive car (100k) and pay cash for it, the dealer outright refused and said they would only finance it which he did. He then attempted to pay it off the next month which he couldn't do because Chrysler financial has a max you can pay each month, so after 4 months he had it paid off. So obviously the dealer wanted that cut of the financing, so what happened when he paid it off? Did they still get that finance commission or does it get charged back?
What happens to dealer financing profit if you pay off car early?
- Thread starter HonorAndHonesty
- Start date
it depends but I heard on my jeep if you refinanced or paid it off before 6 months
that Chrysler financial clawed their kickback back from the dealer.
I refinanced both the 2017 and 2019 cherokees as the finance guy at the local dealership was an egregious turd.
He would bait, switch, delay, slip in, etc tactics. I had 840 credit and suddenly 6 hour of waiting later and the last out of 20 papers to sign
its 3% higher than quoted.
I signed then 2 weeks later refi it as a new car (less than month old/ before first payment) and they would call me complaining.
I told them to pound sand preferably into the finance guy face for being a total scammer.
The second jeep(2019), I told the GM the story from the first one.. and the finance guy did it to me again..
although I went home and made them call me "when ready". So I wasn't waiting 5 hours+ in the waiting room.
I just signed and refinanced The GM called me and I gave him a ration of crap about it.. and guess what they still want to sell me a new car....
Too bad their cars are 50% more than I paid 5 years ago... and rotting on the lot.
Edit: fixed clarity.
that Chrysler financial clawed their kickback back from the dealer.
I refinanced both the 2017 and 2019 cherokees as the finance guy at the local dealership was an egregious turd.
He would bait, switch, delay, slip in, etc tactics. I had 840 credit and suddenly 6 hour of waiting later and the last out of 20 papers to sign
its 3% higher than quoted.
I signed then 2 weeks later refi it as a new car (less than month old/ before first payment) and they would call me complaining.
I told them to pound sand preferably into the finance guy face for being a total scammer.
The second jeep(2019), I told the GM the story from the first one.. and the finance guy did it to me again..
although I went home and made them call me "when ready". So I wasn't waiting 5 hours+ in the waiting room.
I just signed and refinanced The GM called me and I gave him a ration of crap about it.. and guess what they still want to sell me a new car....
Too bad their cars are 50% more than I paid 5 years ago... and rotting on the lot.
Edit: fixed clarity.
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Let me ask you this:
Who cares? Dealer would do you dirty without thinking twice and smile in your face.
Who cares? Dealer would do you dirty without thinking twice and smile in your face.
Who cares? Pay it off and don't worry about it if they get a cut or not.
On a side note, I didn't know a car loan can have a maximum amount one can pay in a month, but I guess given vehicle price tags, that could be the case. So a workaround would be to put a 50% or more down payment.
Edit:
@RooflessVW beat me to it lol!
On a side note, I didn't know a car loan can have a maximum amount one can pay in a month, but I guess given vehicle price tags, that could be the case. So a workaround would be to put a 50% or more down payment.
Edit:
@RooflessVW beat me to it lol!
Did anyone mention the dealer is not your friend?
When I bought my 2018 Q5 I got a special finance rate through the dealer. My salesman said If I paid it off before 6 months he would lose some commission. I didn't pay it off early since the rate was very favorable. In all probability I would have waited the six months if I were to pay it off early as the salesman treated me fairly.
Don’t call them “stealerships” for nothing!
Did he look at his states car buying rules? My dad's uncle tried to buy a brand new Dodge Ram with cash back in 99' or 2000ish dealer said no. When I was a sales associate for a VW dealership we had a guy who brought cash. The dealership owner said Colorado law is 5k or a percent if I remember. I know that due to dealership rules they had to deposit the cash within 12 hours I think. Colorado doesn't require you to finance, or a penalty if you pay off your loan early.
I believe that's illegal.
Pretty sure its not. Its illegal to not accept cash, but they dont have to sell it to you for that price if you are paying cash.
Its in the microfine print somewhere.
There is mucho dirtbaggery going on in most car dealerships at any given time.
(unless you were referring to something else... then details please)
Precisely. If any one actually cares whether their salesperson gets to keep their share of the profit from financing, just hand them a few $100 bills before driving off with your new car and cancel the financing the next day.
I bought my 2017 Corvette and GM had some $1,000 rebate at the time if you financed with them. I wanted to pay cash but figured it was worth it for $1,000. The finance guy asked me to wait 3 months to before paying off the $7,500 minimum amount financed. My sales guy was a weasel and annoyed me so I paid it off the next day.
I tend to be of a curious mind, it's something my friend and I had discussed before and never really knew the answer to.
And since I'm possibly buying a car soon I may finance it to try to get a better price on the car, not that I would lose sleep if I paid it off in a few month's and the dealer lost the commission, I'm just curious is all.
No business is required to accept cash . I've seen many that don't , including several venues here that are owned by the City .
So I don't know the specifics of what they told him, I believe they wouldn't sell it to him for the price, it was a hot car at the peak of the car market and the dealers were doing whatever they wanted. I personally wouldn't spend 100k on a dodge that had an architecture mostly used for rental cars that they threw a big engine in and marked them up 50k from a base model after the added costs but it makes him happy so I'm happy for him!
I know for a fact that our local AT&T store would not accept cash about 10 years ago, I assume it's the same today.
I don't think he's saying cash specifically, he just didn't want to finance it through them.
As others have stated, I don’t really care if the salesperson loses some points on the deal afterwards. They are using every trick in the book to try to squeeze every single penny out of me without regard for how it affects me - turnabout is fair play.
We got our new van from the dealership a few months ago. Financed it with their credit union and put a good chunk down to get the sell price where we wanted it. But I’m already in the process of refinancing with USAA for better terms. They have always done right by us so I’d rather give them the interest points.
We got our new van from the dealership a few months ago. Financed it with their credit union and put a good chunk down to get the sell price where we wanted it. But I’m already in the process of refinancing with USAA for better terms. They have always done right by us so I’d rather give them the interest points.
These "second had info" threads are very hard to try to ascertain what the facts really are. As far as I know, and based on my own experiences-as soon as you have a loan number-you can payoff the balance. I have purchased two vehicles where the dealer asked me to keep the loan for 6 months. Both times I have refinanced in three.
Dealers do not keep a data base who pays off loans early.
They are indeed charged back from the bank for a loan origination commission the bank gives them.
Dealers do not keep a data base who pays off loans early.
They are indeed charged back from the bank for a loan origination commission the bank gives them.
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