FAIR DEAL UNTIL................

[Jonny]

Yeah, I wouldnt have known to ask about the 100% financing if not for this forum. I would have been pissed too since I usually like to put down at least 10-15%. So I'm trying to run the numbers to see if the extra interest cost is still worth it when comparing Kent's deal to other dealers. I have no problem honoring the 6 months if the numbers still work in my favor.

And Meshuggah smokes

So I have been talking with Kent too. Haven't pulled the trigger yet as I am waiting to see when the MY2020 order banks open. But per my conversations with him, you can make a significant additional principal payment on the first payment. So really the additional interest would just be out there for 1 month. He asked that I just keep the loan for 6 months. Might be worth asking about as well to double check

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[JeepSmash]

Yeah, I wouldnt have known to ask about the 100% financing if not for this forum. I would have been pissed too since I usually like to put down at least 10-15%. So I'm trying to run the numbers to see if the extra interest cost is still worth it when comparing Kent's deal to other dealers. I have no problem honoring the 6 months if the numbers still work in my favor.

And Meshuggah smokes

Yeah. I wouldn't have a problem honoring the 6 months if I had known that up front but I feel like it was a little bit shady. Every other part of the deal was amazing. Picked us up at the airport, in and out in an hour. Paperwork ready before we got there. Easiest car buying experience ever.

And yes Meshuggah!! You have good taste sir.

 

[JeepSmash]

So I have been talking with Kent too. Haven't pulled the trigger yet as I am waiting to see when the MY2020 order banks open. But per my conversations with him, you can make a significant additional principal payment on the first payment. So really the additional interest would just be out there for 1 month. He asked that I just keep the loan for 6 months. Might be worth asking about as well to double check

true, I suppose if you did that the interest would be the same. It won't however change your higher monthly payment as the loan doesn't re-calculate.

 

[Al Bundy's Dodge]

So I have been talking with Kent too. Haven't pulled the trigger yet as I am waiting to see when the MY2020 order banks open. But per my conversations with him, you can make a significant additional principal payment on the first payment. So really the additional interest would just be out there for 1 month. He asked that I just keep the loan for 6 months. Might be worth asking about as well to double check

As far as I can tell, he's telling the truth on the additional principal payment. As I said in my first post, i read the loan agreement and there is no prepayment penalty and its a simple interest calculation.

So that certainly seems to be a good idea if you were going to put money down anyway.

Its still odd to me that they are banking on their customers holding the loan for 6 months out of the goodness of their hearts...seems risky from their perspective. But I guess they wouldnt be offering these deals if all kinds of folks were refinancing prior to the 6 months.



I

 

[c2m2h3]

Thanks for posting this.....great info !!
Question - If you pay off the dealer's (Chrysler financing) all but $20 or so and keep it open to help out the salesman and presumably get a better deal on the pricing, what does your payment end up being for the remaining 5 payments ?.....I understand the idea of basically eliminating the interest as much as possible; however, how does that then change the payments ?

Chris

 

[porcusRex]

as for the loan ... google 'rule of 78' its a type of loan where you get screwed up front. some of what i read here seems to indicate that this is the type loan being offered (forced). the F and I guy (finance and insurance) is often a close relative of satan. buyers beware..

dealerships make money off rubes selling them extended warranties, insurance finance and lease deals.. these days a lot of folks look at the monthly amount for a car and nothing else.. what can joe afford to pay each month? sales person and f and i guy look for folks with this goal (what is my monthly nut) and when they figure that out the poor buyer is just a seal in an ocean or orcas...

i dont borrow money for anything other than homes. i dont use credit cards.. i use charge cards (there is a difference). i sort of enjoy screwing with car dealerships but most folks really hate the experience because it really is often a predatory experience.

 

[Carbonalpine]

as for the loan ... google 'rule of 78' its a type of loan where you get screwed up front. some of what i read here seems to indicate that this is the type loan being offered (forced). the F and I guy (finance and insurance) is often a close relative of satan. buyers beware..

dealerships make money off rubes selling them extended warranties, insurance finance and lease deals.. these days a lot of folks look at the monthly amount for a car and nothing else.. what can joe afford to pay each month? sales person and f and i guy look for folks with this goal (what is my monthly nut) and when they figure that out the poor buyer is just a seal in an ocean or orcas...

i dont borrow money for anything other than homes. i dont use credit cards.. i use charge cards (there is a difference). i sort of enjoy screwing with car dealerships but most folks really hate the experience because it really is often a predatory experience.

Peterson Jeep is in Idaho, which outlawed the use of "Rule of 78". As others have mentioned, Peterson Jeep and all other Jeep dealers for that matter that use Chrysler Financial use a "Simple Interest" loan which has no pre-payment penalties. Some dealers might be shady in the way they sell you on their financing by telling you to stay with Chrysler Financial for 6 months, but that's nonsense. You can pay it off or refinance as soon as the loan becomes active.

To recap, Rule of 78 doesn't apply to this deal and it's such a rare type of financing that we typically won't come across anymore. But if unsure, just read the financing agreement and make sure it's a "simple interest loan".

 

[c2m2h3]

Appreciate the info....yes, dealing with dealerships are a PITA.
My question was, IF you wanted to continue with the loan to "take care of" the salesperson and also ensure you get a good deal, by telling them you WILL keep it open for 6 months AND as long as its a "simple interest loan"' however, you pay off ALL but say $50 at the first month, so the salesperson gets the incentive $ and you don't get screwed by really any interest at all, what would your payment become after the first month ? Is it that $50 ? If that becomes your "minimum payment" because that's all that's left, how do you keep it rolling ?

I understand this is a lot of work to keep it open and it's far easier to just pay it off.....Just asking


Chris

 

[imapseudonym]

As far as I can tell, he's telling the truth on the additional principal payment. As I said in my first post, i read the loan agreement and there is no prepayment penalty and its a simple interest calculation.

So that certainly seems to be a good idea if you were going to put money down anyway.

Its still odd to me that they are banking on their customers holding the loan for 6 months out of the goodness of their hearts...seems risky from their perspective. But I guess they wouldnt be offering these deals if all kinds of folks were refinancing prior to the 6 months.



I

We purchased through Kent using their financing as required. We refinanced a month later. I wasn't going to keep the crappy interest rate for 6 months. I read through the contract and it didn't say anything about penalties so we just did it and nothing happened. Got a great deal for choosing their crappy interest rate and took care of it almost instantly after.

 

[Chocolate Thunder]

We purchased through Kent using their financing as required. We refinanced a month later. I wasn't going to keep the crappy interest rate for 6 months. I read through the contract and it didn't say anything about penalties so we just did it and nothing happened. Got a great deal for choosing their crappy interest rate and took care of it almost instantly after.

Yep. 6 pages of back and forth and we’re right back at the glaringly obvious simple solution I put forth in post 5 of this thread.

Sometimes I think people complicate their lives unnecessarily because they’re just not willing to listen to or believe a simple solution to a problem unless it’s their idea. My last boss was like that. I left that job because he was stupid and petty. He’s now trying to implement several of my ideas, but his execution of them is failing because he’s just not very smart.

 

[Scott2.0]

Appreciate the info....yes, dealing with dealerships are a PITA.
My question was, IF you wanted to continue with the loan to "take care of" the salesperson and also ensure you get a good deal, by telling them you WILL keep it open for 6 months AND as long as its a "simple interest loan"' however, you pay off ALL but say $50 at the first month, so the salesperson gets the incentive $ and you don't get screwed by really any interest at all, what would your payment become after the first month ? Is it that $50 ? If that becomes your "minimum payment" because that's all that's left, how do you keep it rolling ?

I understand this is a lot of work to keep it open and it's far easier to just pay it off.....Just asking


Chris

The payment remains the same throughout the loan. If the payoff remaining is less than the scheduled payment, the next payment will be the payoff amount and will then close the loan. It’s not a credit card. There is no “minimum payment”, just the same scheduled payment every month until the balance is zero.

 

[c2m2h3]

Thanks, Scott 2.0

That was, I guess, my point. Not sure how to even keep it open for 6 months AND pay off all but say $50 in the first month to avoide interest charges.
Honestly, while I'm not about to be screwed, I'd happily keep it open to help out my salesperson, IF I got a great deal...If the salesperson can still get the incentive, it makes for a continued good relationship should you need the dealer for something down the road.....

 

[verbaltharhino]

I'm not following what you're saying. Let's say the Jeep was $50k and they only gave you $45k after you crash it. You'd then have to pay the 5k yourself anyways to end the loan with the bank.

What am I missing?

GAP insurance.

 

[verbaltharhino]

It would depend on your insurance and if there was GAP insurance.

Correct. GAP insurance is required in my scenario.

 

[verbaltharhino]

Not the best plan. If you handle the purchase and trade in separately you do not receive the tax offset. You are losing a couple grand on the deal due to this.

You're correct. That's assuming you're getting the same amount for the old vehicle in trade as opposed to an outright sale. I sold my JK to a dealership I didn't buy my truck from. They gave me more than the other dealership was willing to in trade. The truck dealership was lowballing the JK because of the severely reduced price on the truck. A private sale would have got me even more $$ but it would have taken time that I didn't have.

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