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

srs148

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First - a word about my vehicle delivery experience - I took delivery of my JLUR yesterday afternoon at Criswell. I have to say that they are awesome and I highly recommend them. My sales rep Leon was probably the most organized and knowledgeable about Jeeps guy I've ever met. And it's quick and efficient without being pushy or rude whatsoever. Even called last night to make sure I made it home safe and ask if I had any questions now that I'd driven the JL a few hours. He's awesome and I plan to use him again to replace my 2014 GC Summit when the Grand Cherokee (finally) get's it's long-overdue redesign.

About the financing - in the state of MD, banks aren't allowed to levy an early pay-off penalty, so my lender won't charge me if I refi the loan. However, my finance guy said I have to wait 6-months before I refi the loan in order to retain my 2% discount for having used their financing. But there's nothing in my sale documentation that calls out any kind of 2% clawback should I refi before six months time. And besides that, how would they do it? They can't charge my credit card for something I haven't signed off agreeing to.

So how would the dealership pull back the 2% discount from the total sale price if I refi'd the loan next week?
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somedude922

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They won’t. They can’t. Just a scare tactic so they can get their kickback from whatever finance company you used.
 

Ohio Hiker

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Not sure if this applies to your situation however when I bought my Jeep back in April I was going to finance thru USAA due to the interest rate. However the manager of the dealership said if I financed thru Chrysler capital I would get the $1500 rebate which would drop the total cost then I could refi thru USAA as soon as I got the loan info from Chrysler cap. Score!
 
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srs148

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I didn't think so, but wanted to be sure there was no real precedent for it.
 
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srs148

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Not sure if this applies to your situation however when I bought my Jeep back in April I was going to finance thru USAA due to the interest rate. However the manager of the dealership said if I financed thru Chrysler capital I would get the $1500 rebate which would drop the total cost then I could refi thru USAA as soon as I got the loan info from Chrysler cap. Score!
The deal with Criswell is that you have to use their financing or you lose 2% of your discount off of invoice. Since there were no compelling enough offers from Chrysler Capital at this time on 2021s that would compete with that 2% discount, I went with their financing at 4.49% knowing that I'd refi as soon as I could. I'm a USAA member as well so I just checked their rates and they're great. Navy Federal CU is running 2.19% right now, so they're in the lead at the moment, but that could change by next month when I refi.
 

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jwhite77

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First - a word about my vehicle delivery experience - I took delivery of my JLUR yesterday afternoon at Criswell. I have to say that they are awesome and I highly recommend them. My sales rep Leon was probably the most organized and knowledgeable about Jeeps guy I've ever met. And it's quick and efficient without being pushy or rude whatsoever. Even called last night to make sure I made it home safe and ask if I had any questions now that I'd driven the JL a few hours. He's awesome and I plan to use him again to replace my 2014 GC Summit when the Grand Cherokee (finally) get's it's long-overdue redesign.

About the financing - in the state of MD, banks aren't allowed to levy an early pay-off penalty, so my lender won't charge me if I refi the loan. However, my finance guy said I have to wait 6-months before I refi the loan in order to retain my 2% discount for having used their financing. But there's nothing in my sale documentation that calls out any kind of 2% clawback should I refi before six months time. And besides that, how would they do it? They can't charge my credit card for something I haven't signed off agreeing to.

So how would the dealership pull back the 2% discount from the total sale price if I refi'd the loan next week?
I'm curious how this works too as I might be in a similar situation. I would think that they can't touch the 2%, but when you re-finance you are essentially paying off the old loan and I've heard there are early payoff costs if its before 6 months. I've now heard how much these early payoff costs are though.
 
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srs148

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I'm curious how this works too as I might be in a similar situation. I would think that they can't touch the 2%, but when you re-finance you are essentially paying off the old loan and I've heard there are early payoff costs if its before 6 months. I've now heard how much these early payoff costs are though.
It depends on the state bank regulation and the lender. I purchased my car in the state of Maryland which apparently does not allow lenders to levy an early payoff penalty, so my lender doesn't have one. That's why I was concerned about the dealer's ability to get their discount back (though I was already skeptical if that was possible).

Ask your finance person if your lender would levy one on your loan - he /she have a dozen lenders to choose from, so they can likely find a lender who will not. With that said, watch out because they'll likely steer you to the lender with highest profit for the dealership or one of their industry friends. Case in point - my finance guy had a screen full of lender options in his loan origin software, but called his friend at US Bank and only ran loan and Lease options through her.
 

jwhite77

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It depends on the state bank regulation and the lender. I purchased my car in the state of Maryland which apparently does not allow lenders to levy an early payoff penalty, so my lender doesn't have one. That's why I was concerned about the dealer's ability to get their discount back (though I was already skeptical if that was possible).

Ask your finance person if your lender would levy one on your loan - he /she have a dozen lenders to choose from, so they can likely find a lender who will not. With that said, watch out because they'll likely steer you to the lender with highest profit for the dealership or one of their industry friends. Case in point - my finance guy had a screen full of lender options in his loan origin software, but called his friend at US Bank and only ran loan and Lease options through her.
I’d like to use the 36mo 0% financing from Jeep but haven’t heard if I still get the 1-2% invoice discount.
 

KingBlotto

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I posted this story in another thread, (apologies to Mods if this is against policy, but it applies here).

A few months ago I bought my daughter a Volkswagen as a graduation present. They had a good deal off MSRP, I wanted to pay cash but they wouldnt sell to me at that price unless I financed. I asked if there was a prepayment penalty and the Sales manager was kind of jerk and said "No, but you're required to keep the loan six months - you can call the Volkswagen regional manager if you want." I was like eh whatever... I go to get the car, and Im signing paperwork and look at the loan (this is key read your contract) and notice there's no prepayment penalty. So I ask the finance manager "Just to confirm, there's no prepayment penalty?" and actually tells me "No, there's not, it's a gentlemen's agreement you keep the loan six months." At that point I went home, got my log in to VW Financing a week later and paid the loan off. Gentlemen's agreement? LOL

Don't listen to what they tell you, read your contract thats what governs your loan.
 
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srs148

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....Don't listen to what they tell you, read your contract thats what governs your loan.
I read through my loan and sale docs carefully as soon as I got home, so figured I was in the clear, but wanted to be sure I hadn't missed something that someone else may have seen in the docs.

Gentlemen's agreement... that's funny. I didn't push the subject during the signing process as I figured it was a 'soft' rule (i.e. unenforceable).
 

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KingBlotto

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I read through my loan and sale docs carefully as soon as I got home, so figured I was in the clear, but wanted to be sure I hadn't missed something that someone else may have seen in the docs.

Gentlemen's agreement... that's funny. I didn't push the subject during the signing process as I figured it was a 'soft' rule (i.e. unenforceable).
Unless it's in the contract theres no way they can enforce that. The sad thing is, this was a local dealer, had they been honest with me, I would have probably floated the loan for six months, but when they tried to game me - screw it.
 

Windshieldfarmer

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I work in the financial services with auto lending. Banks and credit unions typically give the dealers a 2% commission for the loan but require the dealer to pay back the amount if the loan is paid off or refinanced in the first 90 - 180 days. The dealer is generous to pass the discount to the buyer...and the buyer should honor the dealer request. That said the dealer can not typically claw back the discount.
 

HEX87

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First - a word about my vehicle delivery experience - I took delivery of my JLUR yesterday afternoon at Criswell. I have to say that they are awesome and I highly recommend them. My sales rep Leon was probably the most organized and knowledgeable about Jeeps guy I've ever met. And it's quick and efficient without being pushy or rude whatsoever. Even called last night to make sure I made it home safe and ask if I had any questions now that I'd driven the JL a few hours. He's awesome and I plan to use him again to replace my 2014 GC Summit when the Grand Cherokee (finally) get's it's long-overdue redesign.

About the financing - in the state of MD, banks aren't allowed to levy an early pay-off penalty, so my lender won't charge me if I refi the loan. However, my finance guy said I have to wait 6-months before I refi the loan in order to retain my 2% discount for having used their financing. But there's nothing in my sale documentation that calls out any kind of 2% clawback should I refi before six months time. And besides that, how would they do it? They can't charge my credit card for something I haven't signed off agreeing to.

So how would the dealership pull back the 2% discount from the total sale price if I refi'd the loan next week?
I'm going to be in the same boat as you soon, I really don't want to wait 6 months before I refinance with Navyfed and get a 2% interest rate!

I read from previous members that they refinance as soon as they left the lot. Unless they have it in sale contract I think we should be good. Keep me posted on what you do please!
 

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I don't think they can claw it back. That being said, these deals will go away if people continuously do that. I'd compare the deal based on keeping the financing for the minimum 6 month period.
 
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srs148

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I'm going to be in the same boat as you soon, I really don't want to wait 6 months before I refinance with Navyfed and get a 2% interest rate!

I read from previous members that they refinance as soon as they left the lot. Unless they have it in sale contract I think we should be good. Keep me posted on what you do please!
I looked over my contract and didn't see anything. And the finance guy himself said that MD doesn't allow early payoff penalties, so we know nothing would come from the lenders. I'll likely move forward as soon as I receive the first statement / welcome from US Bank and will report back here.

I'm doing Navyfed as well and, as an FYI, called and asked them if I would still qualify for a New Car loan rate if I wait six months to turn it over and they said that I would still qualify as long as the vehicle is under 7500 miles.
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