Getting 1k Rebate and then Refinancing

[DaveK98]

Getting my truck late this week.



Dealer says I can take the 1,000 rebate if I finance with them and then turn around and refinance through my bank.



My bank says this is just fine.



What is the fine print with Dodge about the loan? Want to make sure I'm not getting bamboozeled... ...



Thanks



Dave

 

[dhill]

The dealer I bought through asked that if I choose the $1k rebate for cfc that I make a payment or two before I refinanced. Bank said that was ok too. I choose to go with the 0% instead of the rebate, because for me it works out better.



Dave

 

[Racechaser]

Did the same thing, but the rebate was $2500 a month or so ago. Dealer told me to make 3-4 payments first.

 

[DaveK98]

The finance rebate is 1K the normal rebate is 2k so a total of 3k for the rebate now. My credit union says I don't even need to make a payment but I don't want to get cfc mad at my dealer as they have been really cool.

 

[Po' Riggity]

I got a 2k finance rebate by financing through CFC, then going down to wells fargo, and getting half the finance rate, and giving them a check the next day.

Scott

 

[Tomeygun]

Getting my truck late this week.



Dealer says I can take the 1,000 rebate if I finance with them and then turn around and refinance through my bank.



My bank says this is just fine.



What is the fine print with Dodge about the loan? Want to make sure I'm not getting bamboozeled... ...



Thanks



Dave

No fine print, on the contract it cleary reads "no pre-payment penalty"



Your good to go

 

[WSnyder]

Wait a minute !

Think about this. Your first payments on a loan are primarily interest with very little being paid on the principle. If you make a payment or two (or more) to Dodge on their loan they are making back all or most of the money given on the rebate. You need to look at the loan details ($ involved interest/principal) to see if you can come out ahead on something like this. Some sales people have been known to push this for questionable motives. Be diligent and aware.



W. Snyder

 

[GOgle]

I was told i have to finance 15k for 90 days... .

 

[QWaller]

I also was told 90 days. Not true, I made two payments and then switched

Could have sone it sooner

 

[2Gen3Gen]

I paid mine off before I ever got a payment book. The rebate was great! :-laf

 

[RJOL]

I took the 1K rebate from Chrysler Financial and then refinanced with my local credit union before the first payment was due.



The reason that some dealers tell you that you have to make three payments is that they do not get their kickback from Chrysler Financial if you don't make at least three payments. My dealer even wanted me to finance the whole amount, without a down payment, and offered to split some of the money they got back, with me.



You absolutely do not have to make any payments to them before you refinance or pay it off. I don't feel any loyalty to Chrysler Financial when their intrest rate is 3% higher then the rate I can get on my own...

 

[Tomeygun]

Think about this. Your first payments on a loan are primarily interest with very little being paid on the principle. If you make a payment or two (or more) to Dodge on their loan they are making back all or most of the money given on the rebate. You need to look at the loan details ($ involved interest/principal) to see if you can come out ahead on something like this. Some sales people have been known to push this for questionable motives. Be diligent and aware.



W. Snyder

well... if I remember correctly, Chrysler uses a "simple interest" loan for there autos



So the interest portion of the loan payment stay pretty close throughout the loan. . I think... ... ... . :-laf

 

[AWray]

Tomeygun,



I do not intend to bust you chops but simple interest calculations are very different from an amortization schedule that determines how principle and interest are paid on a loan. The normal practice is to recoup the interest up front and allow the principle to be paid toward the end. The logic behind that is to protect a lender against the activites described above. If interest is paid on the front end of a loan, the lender makes their money sooner than if the payments are equal portions of principle and interest.



Everybody keep this in mind. You should compare the payments between a 0% interest loan and what the payments will be if you take the cash rebates and finance at a going interest rate. If the payments are the same, you should take the cash rebate. The reason is you will have less principle to repay should you be able to pay the loan off early. If you fully intend to take the loan to term, pick your poison.



Good Luck,

Aaron

 

[klenger]

Simple interest is computed by taking the annual percentage rate, dividing by 12 (months), and multiplying that amount by the current balance. Deduct the interest from the payment, and the rest is principal. Deduct the principal from the balance, and then repeat next month.



Example using numbers to keep math simple:



Loan balance = $30,000

Annual interest = 6%

Payment = $500

Monthly interest rate = 6% / 12 = 0. 5% = . 005



1) Interest for month 1 = . 005 x $30,000 = $150

2) Principal for month 1 = $500 = $150 = $350

3) Balance after month 1 = $30,000 - $350 = $29,650

4) Goto Line 1) till paid off.



The interest is higher at the beginning of the loan than at the end, but is not inflated at the beginning like auto loans were years ago. Also, because an auto loan is for a much shorter period of time that a house loan, more of the payment is applied to the principal for an auto loan.

 

[Tomeygun]

Tomeygun,



I do not intend to bust you chops but simple interest calculations are very different from an amortization schedule that determines how principle and interest are paid on a loan. The normal practice is to recoup the interest up front and allow the principle to be paid toward the end. The logic behind that is to protect a lender against the activites described above. If interest is paid on the front end of a loan, the lender makes their money sooner than if the payments are equal portions of principle and interest.



good Luck,

Aaron

true, Home mortgage = interest is front loaded

But I think the chrysler loans are simple interest, Heck I cant remember

 

[surfbeetle]

One More thing to consider...

Another thing to remember the mileage on the vehicle. The Credit Union that I finance with considers a vehicle to be new until it hits 7500 miles. They would then charge a higher used car rate if you financed with them after that mileage. Whatever you do as far as making one payment or not, make sure that you can still get your "new car financing" with your financial institution. Some people rack up the miles very quickly.

 

[Newt]

The guy at the dealership you have to look out for is not the salesman. It's the money guy where you sign all the papers. If you don't do all your homework in advance, he'll slip it to you in ways you never thought of.

 

[DaveK98]

What else do I need to watch for? I know I have the pay the ~$900 for delivery and ~20 for diesel fuel but is there anything else that they will tell me I have to pay for that I really shouldn't?



I won't fall for the undercoating, scotch guard, paint treatment so don't worry about that.

 

[Newt]

You mean they're not going to fill it up for you? :-laf



Just watch when they figure the payments. Are you going to finance through the dealer? Go to BankRate.com. They have a calculator where you can figure what your payment should be. Check if it's cheaper to take the finance rebate or finance elsewhere. When you go to sign see if his payment figure matches yours. If it doesn't, ask him to explain.



Once you get all the crap out of the way, ENJOY YOUR NEW TRUCK

 

[DaveK98]

I'm getting the truck with my company discount at 1% below invoice. So I'm not expecting them to throw a bunch in free.



I'm going to finance it through them and then turn around and refinance it through my credit union at 4%. Want that 1k rebate.



Yup, I hope to enjoy it. I'm hoping that it will shoehorn into my garage. I think it's 249 inches and my garage is about 253-255 or so!