Bought at Criswell and used their financing - no pay-off penalty, but risk of losing 2% discount post-sale? How?

HEX87

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Hey curious on what you ended up doing?? Did you refinance with navy Federal?





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srs148

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Hey curious on what you ended up doing?? Did you refinance with navy Federal?
Not yet. I haven’t gotten the first statement from Us Bank yet, but I plan to as soon as I get it.
 

norbert

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But the dealer is ripping you off with a higher interest rate! And auto loans are front end loaded. Most of the interest is charged up front. This is a new scam by the dealers.
 

HEX87

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Not yet. I haven’t gotten the first statement from Us Bank yet, but I plan to as soon as I get it.
I picked my up Jeep two weeks ago and I received my chase statement with 4.49 APR.. I have 800 credit scored and they said that's the best they can do for me because of the 5% below invoice price I agree to get if I would finance with them. They said after 6 months I can refinance, I said what is stopping me from going to Navy Federal after I leave the lot? The finance guy said I will be getting a bill from the dealer for not wating 6 months, I said how much is that? He said he didn't had an answer. No one from the dealership told me how much I would pay in writing/verbally if I refinance before 6 months.

I can get 2.29% with Navy Federal, that would save me an extra like $50 a month. If I wait, is an extra $250 more I would paying (no one else in las vegas would come close to 5% below invoice, the 2nd best offer was 1000$ over invoice for my order).

I'm thinking if $250 is worth getting the %5 below invoice if I would break that agreement with them to stay for 6 months...

I love my diesel jeep, the dealership has been great, they replace the dashboard and some other interior parts right away because I found a very small scratch. I am a man of my word, that is stopping me for refinancing right away. My first payment isn't due until November 19 so I have some time to really think it over..
 
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srs148

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But the dealer is ripping you off with a higher interest rate! And auto loans are front end loaded. Most of the interest is charged up front. This is a new scam by the dealers.
My loan is simple interest, it’s not front-loaded like a mortgage.

I picked my up Jeep two weeks ago and I received my chase statement with 4.49 APR.. I have 800 credit scored and they said that's the best they can do for me because of the 5% below invoice price I agree to get if I would finance with them. They said after 6 months I can refinance, I said what is stopping me from going to Navy Federal after I leave the lot? The finance guy said I will be getting a bill from the dealer for not wating 6 months, I said how much is that? He said he didn't had an answer. No one from the dealership told me how much I would pay in writing/verbally if I refinance before 6 months.

I can get 2.29% with Navy Federal, that would save me an extra like $50 a month. If I wait, is an extra $250 more I would paying (no one else in las vegas would come close to 5% below invoice, the 2nd best offer was 1000$ over invoice for my order).

I'm thinking if $250 is worth getting the %5 below invoice if I would break that agreement with them to stay for 6 months...

I love my diesel jeep, the dealership has been great, they replace the dashboard and some other interior parts right away because I found a very small scratch. I am a man of my word, that is stopping me for refinancing right away. My first payment isn't due until November 19 so I have some time to really think it over..
Look in the fine print of your agreement of sale where it stipulates you must wait 6 months to refi or you'll have to pay the 2% back. I searched my paperwork and could not find anything to that effect.
 

gqgambler

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Most car loans carry no pre-payment penalty, but it does depend on the state. When you use a dealer financing or a bank that they work with they get a kickback for the business. That's why the finance price is often better than a cash offer because the dealer can pass on the discount to you; word of advice, take the financing and then pay off the loan (more advice, shop around and come back to the dealer with a better rate, they often may counter the rate - often they have room to move on their rate). They need you to hold the loan for a minimum time for them to get the kickback; typical is a minimum of 90 days. Its a gentleman thing to do that may cost you a few hundred bucks to hold the loan for 90 days depending on the daily charge. I say its a gentleman thing to do, because you don't have to, but think about if you plan to go back to them for repeat business and want to get the best price on another purchase; remember they don't have to pass anything on to you.
 

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I got 0% for 36 but that was on a base sport diesel. Not sure if it is only on certain models.
 

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My loan is simple interest, it’s not front-loaded like a mortgage.
Sure about that? Most auto loans are front loaded. Simple interest just means there's no penalty if you decide to pay it off early. That's why if you try and pay extra on your note, the bank default is to apply it to your next payment instead of the principal. They try to make sure you pay that interest.
 

dgoodhue

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My loan is simple interest, it’s not front-loaded like a mortgage.
Sure about that? Most auto loans are front loaded. Simple interest just means there's no penalty if you decide to pay it off early. That's why if you try and pay extra on your note, the bank default is to apply it to your next payment instead of the principal. They try to make sure you pay that interest.
Pretty much every traditional loans are charging you interest on the principal. It seems like it front loaded because of the interest that is being charged.

For example. I will use 6% which works out to be 0.5% per month. The interest on a $40,000 car loan is

$200 for the month for $40k balance, $100 for the month for $20k balance, the lower the balance the less interest.

Same goes for Mortgages too, $400k principal balance is $2000/month for interest 0.5%, 6% annually, $200k is $100/month of interest.

The shorter the term (length) and lower the interest rate the less front loaded it seems. The amortization calculation for figuring out the monthly payment, in simple terms just figures out how spread the principal over the term of the loans (ie 3, 5, 6 years for car loan or 15, 30 years for a mortgage)

Some loans (which I think have been outlawed by the government for consumers) actually charge all the interest up front. So the lenders would figure out the interest for the loan, you would pay all the interest in your monthly payments at the beginning of the loan before one start paying the principal loan balance.
 

jwhite77

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I got 0% for 36 but that was on a base sport diesel. Not sure if it is only on certain models.
I was also able to get 0% for 36 months through Chrysler Capital. I also got the great low invoice price on a JLUR through Steve in Linn, MO.
 

mft

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They told me the same thing. I don’t see how it can be enforced but by that point I was dubious about their financing and just wanted to drive off the lot (we had to wait almost an hour for the finance guy after finalizing everything else) and the rate wasn’t competitive with my credit union. I had them take off the 2% discount related to the financing off and signed. My credit union had a check issued in less time than we had sat in the waiting area for the finance guy. No complaints at all going through Criswell and my salesperson was cool but given the financing dependent discount I’ll probably look at Koons next time.
 

AZHUND

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I have heard this in various ways during each of my last ~4 or so vehicle purchases from a range of small town to high volume dealers so don't know what is going on. It is easy to check the paperwork for any penalties for prepaying so I have ignored them each time and paid when/how I wanted to.

After the various lies and attempts to (financially) screw me in a few of these purchases by their always loveable finance dudes, I have no issues with preventing dealers from getting kickbacks.
 

HEX87

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I did it, I refinance before my 1st payment was due with navyfed with a 2.29% interest for 6 years. It brought my payment like $50+ a month.
 

Hornet

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I did it, I refinance before my 1st payment was due with navyfed with a 2.29% interest for 6 years. It brought my payment like $50+ a month.
Good for you, dealers make plenty of money off of people already. The monthly payment needs to be comfortable to you and not the dealer, they play the game, you play the game too.

I wish I could have access to Navy Federal but I unfortunately don't or else I would also use them myself.

Enjoy your Jeep !!
 

TheRaven

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They told me the same thing. I don’t see how it can be enforced but by that point I was dubious about their financing and just wanted to drive off the lot (we had to wait almost an hour for the finance guy after finalizing everything else) and the rate wasn’t competitive with my credit union. I had them take off the 2% discount related to the financing off and signed. My credit union had a check issued in less time than we had sat in the waiting area for the finance guy. No complaints at all going through Criswell and my salesperson was cool but given the financing dependent discount I’ll probably look at Koons next time.
Koons does the same thing. They were 1.5% high on their best rate, and said it was that or nothing. I ended up going with Criswell BECAUSE they let me sacrifice 2% of discount in favor of leasing at the buy rate. I think it depends on your individual situation, but for me the overall cost was lower by taking the 2% hit on discount in favor of the lower APR. I think perhaps if you are going for a shorter loan or lease, you may make out better with Koons.
 

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