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 the numbers show
Counted from the threads quoted below. How we count
- The most recent one is from March 2026.
- It is not one crowd: 2 people on Reddit and 1 on Stack Exchange ran into the same thing.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
Found another way around this?
Share your steps and trade-offs so fellow engineers don't have to reinvent the wheel. No account required.
- 1paying cash for the vehicle outrightDid this help you?
- 2reading and understanding the loan terms thoroughly before signingDid this help you?
- 3getting written agreements from the salesman regarding early payoffDid this help you?
- 4negotiating the car price, trade-in, and loan terms separatelyDid this help you?
- 5using an online internet department to purchase the car and minimize dealership frictionDid this help you?
- 6Reading the fine print of the contract for early prepayment penaltiesDid this help you?
- 7Paying off the loan within the first few days regardless of dealer requestsDid this help you?
- 8Making the required number of minimum payments before paying off or transferring the loanDid this help you?
In their words
Unedited, grouped by where they were said, most upvoted first within each place, 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 ↗
“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 ↗
“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 ↗
Where this came up
People with this problem also raised
- 9Should I pay cash for a car or finance it?
- 13Is refinancing a car loan worth it for a longer term?
- 57Is it a smart idea to buy a new car right now?
- 15Should I sell my paid off car to invest the cash?
- 27Is it safe to keep driving with needle bearings in the transmission pan?
- 5How to tell if a car repair can wait