Jax123

That Dude talking "Paying Cash" would cost you the $1000 finance rebate.
Some are rich but not so smart.

Viking1204

I bought my truck and paid the loan off when my first payment became due so it was about 30 days after I bought my truck. My salesman told me I could pay it off two days later if I wanted and there was no penalty. I can't believe how many dealers are getting their salesman to lie just to get a few months of interest!

humblerb

It may not be the salesmen are lying. It may just be what people are hearing.
My Ford finance guy said he could tell from my credit history, that I usually refinance quickly. He just told me that his dealership loses their $1,000 if I pay off the Ford load early. He asked if I would consider making at least 4 payments before I refinance or pay off.
If you look at dollars instead of rates, you might be surprised. In my case, I financed $35,000. I don't know the rate and don't care what it is. For the sake of argument, let's use a high rate of 6%. If you make 4 payments, like I was requested to do, the total interest paid is $520. At 3% the rate is $342. For them to get you a $1,000 discount, they need you to pay $178 interest. If you make 3 payments before refinancing, it is more like $135.
Personally, I want the dealership to be around when I get ready to buy my next car, so I am not opposed to them making some money. They want me to spend and extra $178 to get a $1,000 discount? I can live with that.
Also, I agree about the guy wanting to pay cash losing $1,000. Even if you can pay cash, you would be $865 ahead to finance for 90 days. Makes sense to me. I can and will pay mine off in a couple of months, but I will allow the dealership to retain their incentive by making at least 3 payments before paying it off. It just makes financial sense to me.
But even if you can't pay yours off and need to refinance, it only costs $2.50/month over a 60 month note to keep the dealership whole on the finance deal.

Stinger

You are way more understanding to the dealer's financial wellbeing than I would ever be. I would at least negotiate the added amount of interest that I would have to pay off of my purchase price or at least have them provide some accessories for that amount. The way I look at it is the dealer should want me to be "around" financially down the road to be able to purchase another vehicle from them. Buy hey, that's just me.

humblerb

If $138 is the difference between you being able to afford a vehicle down the road, my guess is you just bought your last new vehicle anyway.
I work in a business where the end-users beat down all of their suppliers and ran about half of them out of business. All that did was cost them money in the long run because with less competition, I don't have to be as aggressive on quotes. All my customers see is that they saved 0.5% five years ago.
Like I said, I'm OK with the guys I deal with making a little money. If I drive them out of business by beating them down (or in this case, by taking a $1000 incentive away from them), they probably won't be around when I get ready for my next one. With the internet, we can all see dealer costs on vehicles - even their incentives if we try hard enough. If they lose money on sales, they aren't going to be in business much longer.

peterhurcos

I took the 5% financing to get the discount and then promptly used savings to pay it off. No penalty.

Actually, when you think about it, I probably would have been better off refinancing at credit union for 2% instead of paying cash. Its not hard to beat a 2% return these days in the financial markets. I just don't like carrying debt, period. But its not the rational thing to do these days.

Sure, taking on more debt than we can comfortably service is a mistake, no matter what the interest rate. But that's a different issue.

Anyway, I hope the OP doesn't buy extended warranty at dealer without checking with on-line discounters first.

Stinger

I was more so referring to your figure of $520.00 (4 months interest). If you feel comfortable paying $520 more for a vehicle than me, more power to you. It's your money. Spend it how you want and I'm not saying that sarcastically. "Most" dealers aren't going to sell cars for a loss unless they've been sitting on their lots for months on end. I've paid 200 under invoice before rebates for my last 2 f150s and I didn't even negotiate more than 10 mins to get that price. Dealers love to say they are losing money when they sell a car at or below invoice which is a crock of u know what. There is holdback, factory to dealer incentives, and promotions. Another thing is that "invoice" isn't what it used to be. Example: sticker on my 05 was 41k, invoice was 36k. Sticker on the 12 I'm looking at is 48k, but invoice is only 44k. So, my 05 costed 7k less "msrp", but invoice was 1k more off. The public has become so infatuated with invoice now that it is so readily available via the internet that the manufacturers have just adjusted the invoice numbers against the msrp numbers to turn more profit. Those who aren't savy car buyers may not be aware of that. Like the last sales manager said to me, "we may make less of a profit on you, but we are still making a profit. We'll just make up the difference on the next buyer. We always do. You'd be surprised how many people pay way too much for their cars.". True story, so yeah, $520 is $520. Why give it to the dealer? If the dealer thinks I'm unreasonable with my negotiated price, he won't sell it to me. Again, I'm not trying to be disrespectful, I'm just not going to pay more for a vehicle just so a dealer can make more money. Doesn't make sound financial sense to me.

gregsf150stx

That dealership if full of $&%*!!!!

I've had TWO ford dealers tell me I can pay it off as soon as i wanted.

If BOTH of them lost $1,000, then I think they would have asked me to wait.

actually the first dealer, i paid the loan down to $100 and kept it for 3 months.

but a dealer is NOT losing $1,000 by you paying it off early!

Scuba Steve

Here it is! I will post a few more later on...

gregsf150stx

Scuba Steve, did you ask the dealer/finance mgr about the $1,000 Ford Credit Rebate?

interested in what they had to say about paying it off early.