thejimmster

I've seen a few posts about refinancing an Acura Dealer Loan. I have a great offer with rebates, discounts, etc. but the Acura Dealer has a high-interest rate to get the rebates/discounts. Is it possible to take the offer and interest rate, then refinance the loan shortly after the purchase with a bank or credit union (lower rate) without any penalties?

RDX2O2O

You could. But you should ask dealer how long to wait, so dealer won't get a charge back for the finance referral. Typically it's 6 months, and this way dealer don't give you stink eye when you take car there.

thejimmster

Thanks.

My only concern is that if I ask the dealer and they know that I may have intentions to refinance that they revoke the offer.

Madd Dog

Look at the paperwork, not the dealer. The loan agreement says how long you may have to wait to pay off the loan, if at all.

NBP04TL4ME

Read the note/loan paperwork and make sure there are no prepayment penalties, but other than that - yes you can refinance.

Beefy_Doc

My salesman said to refinance after making 3 payments so the dealer won't get charged back. According to the paperwork, there is no prepayment penalty. Most auto loans consider your car still new if it has has less than 7500 miles. Bottom line is refinance when you want to, but dealer may not be happy with you if you do it sooner than 3 months from purchase.

Madd Dog

If I liked the salesman and the dealer, I would give them the three months.

sonyfever

Are you saying dealership offer you a better price on the condition that you finance through them? Is the loan from Acura Financial Service(AFS), or dealership's referral? Sounds to me like the latter because you said high rate... but just FYI, if it was AFS, you can pay off the loan pretty early (in my case just one month of payment), and dealership still get the kickback.

flames9

Many manufacturers offer incentives to finance. When I bought my Volvo in Feb 2019, I haggled to a (what I thought) was a good price and then the sales manager said, ok, if you finance thru us, I can give u another $2000 off, as he admitted the dealership received a kickback. Only catch was that he asked I keep it for 3 months!! yes I could pay it off the next day and i would not face any penalties, but the dealership gets hassled. He stated to just leave 3 months of payments on the acct....and everyone is happy! Mistake I made was waiting for the first letter from the volvo financial.....it was like 1.5 months down the road, and of course I had accrued interest charges!! I should have contacted them ASAP and then put down the $$$$$

Beefy_Doc

Yes, I could get $3000 off or 0.9% AFS financing, but not both. The financing was through AFS but the rate is 5.09%. I also got $1000 off on the Conquest offer because my wife drives a Honda Pilot. I am going to refinance through a credit union I belong to at 2.49% just trying to decide on doing it after one month or three. If the dealer keeps the kickback, I'll do it after one month

lausy

Wow, $3K seems to be a lot off. It was only $1500 back in December. I know my finance guy lied to me trying to say I lose the loyalty and holiday cash ($2,250) too if I didn't finance with them, but that simply wasn't the case, I would have only lost the $1,500 finance cash if I took the 0.9%. In the end, I got the $1500 rebate and 3.14%APR/60 month. I was upfront during my negotiations. I told them if I took the finance rebate, I was not expecting some outrageous rate since I know I have excellent credit. To the finance manager's credit, at least they didn't screw me that way.

russianDude

Capital One 5 year CD pays 1.60% APY, that ears $3300 in interest if you keep 40K in the bank instead of giving it to the dealer.
If you refinance your car, you will get 4-5% loan at best. I know its tempting just to get $3K off, but it needs more careful calculation

Beefy_Doc

​​​​​​Understand where your coming from, and it's not 0.9%, but I can get an auto loan from my credit union for 2.49%. And I paid a lot down, do we're not talking about anywhere near a $40k loan. Numbers aren't as big as they might appear.

gtssenior

I got an offer from Acura not to refinance, but to trade in my 2019 for a 2020 and they would lower my monthly payments. There are a few key issues with this. I have about 16 months on a 3 year loan to go and the lower monthly payments on the 2020 would be back to 36 months. I did the math and the total payoff on the 2020 with the lower monthly payments but a longer term would be about $15K more than the remaining payoff on the 2019. If I kept the vehicle for 8 years, the Blue Book difference then for the two would probably be only a couple of thousand dollars essentially eroding the $15K difference and a lost opportunity to get an investment return on the $15K. My 2019 vehicle doesn't seem to have any individual issues, so why take a chance on trading in for some problems? I only have about 15K miles on it also. Buyer beware!

IM542

Hmmm. Just got 2.99% refi on my 2019 that I've had for a year. No cost refi, too.

Local credit union.

angelmans

My dealer told me the only way to do it, and I had to wait for a couple of years.

NBP04TL4ME

If you actually purchased a vehicle and signed a contract - you need to read the contract you signed. Dealer will tell you water is dry, if it benefits them.

With that said, I know that some dealers don't get paid for the finance contract if the customer refinances within the first couple of months. So if you were to wait and refinance say, 90 days later, the dealer will likely get paid. Terms and conditions obviously vary with the different banks.

janamacon

Well, that's not ok, you should contact a lawyer and see if the dealer is right!

das1996

I was told similarly by a diff brand dealer. Need to make at least 3 payments before refinancing. However loan contract had no prepayment penalty verbiage.



The dealer offered a very competitive rate of 4.99%/5yr. Credit score is in the 800's. The following day I had the login email for the bank's site. Logged in, got loan #, pay off amount and refinanced at 1.99%/5yr with my CU. Original bank had the payoff check within 4 business days of loan origination. No penalties. It's been 2 months now and no clawback of the $1000 rebate either. I would have gladly kept the original rate had it been more reflective of my credit worthiness. I came in with my own spreadsheet of all the numbers broken down. The final amounts (OTD) were pennies apart. Screw the dealer and finance guy. Based on my dialogue with the finance guy, I think he had a pretty good idea of how this deal was going to go.

NBP04TL4ME

Dealer had the higher rate to you as a different way to make $$. The bank would have cut a check to the dealer for some amount of $$ after 90 days or so. If you stayed with the original contract you would have paid more interest over time so the bank makes more and they share a piece with the dealer. So long as there is no prepayment penalty as you outlined above, you did nothing wrong. You simply short circuited the dealer/finance dept's opportunity to add more to the deal they made with you. I don't know the terms and conditions related to the $1000 rebate, but having a hard time seeing anyone legally coming after you to get that back.