Said It Here

Should I take car dealer financing for a rebate and pay it off early?

Dealers often offer cash buyers a purchase rebate if they use in-house financing, promising no penalty for early payoff. However, buyers face hidden hurdles like mandatory waiting periods of up to three months before paying off the loan to avoid lender penalties, or dealerships refusing the agreed-upon price without financing.

What people tried

Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.

  1. 1
    paying cash for the vehicle outright
  2. 2
    reading and understanding the loan terms thoroughly before signing
  3. 3
    getting written agreements from the salesman regarding early payoff
  4. 4
    negotiating the car price, trade-in, and loan terms separately
  5. 5
    using an online internet department to purchase the car and minimize dealership friction
  6. 6
    Reading the fine print of the contract for early prepayment penalties
  7. 7
    Paying off the loan within the first few days regardless of dealer requests
  8. 8
    Making the required number of minimum payments before paying off or transferring the loan

In their words

Unedited, most upvoted first, each linked to the thread it came from.

I had cash, the dealership wouldn’t give me the agreed upon price without dealership financing.source ↗

They wants me to pay interest for 3months then I could pay it off. F that.source ↗

yuiop300 · r/personalfinance · 2,894 upvotes

Did this earlier this year. Dealer requested we not close the account until month 3 because they may get a penalty and the lender could block us in the future.source ↗

lightofhonor · r/personalfinance · 222 upvotes

Most of the dealers I went to said they could give me a rebate (typical 750) if I financed the car through them. They claim there is no penalty for paying off the loan early.source ↗

This does not seem right to me. I can understand why they would make money on the loan. I could see why a $50 rebate to finance the car would make sense. However, I think the car dealer has a trick and I want to know what it is.source ↗

Bob · Personal Finance & Money Stack Exchange · 15 upvotes

Where this came up

People with this problem also raised