GM Financing - Early refinance

Imcrazy · July 31, 2019

Even if you don't have excel just google loan amortization table and you can do the math.. It's often always been a wash between incentives and rebates so that the mfr makes about the same profit whether it's on the selling price or the interest rates...

We had considered taking the incentives for financing with GMF and then re-financing the loan the next month when we got the paperwork but, we decided that it wasn't worth the hassle over the $1000 of incentives we gave up..

There is no prepayment penalty on GMF loans so anyone telling you that 6 months of payments need to be made is lying..

Daverado · August 2, 2019

On 7/31/2019 at 1:27 PM, KARNUT said:

Damn, poor guy comes on here trying to help out and bumps into financial wizards. I think his advice is well intentioned. I have real good credit. I pay very little interest for lots of reasons I wouldn’t get into here. I’m not going to finance twice. I get my deal on the front end. Add my payments to check their numbers and go on.

It did seem well-intentioned to me as well, but his approach is way off base.

"Look I see something different here everyday, what do you think about that" is a much more productive approach than "everyone else is wrong you really need to listen to me instead" and then spouting bad information. Even when you're right you're going to annoy a bunch of the people you're supposedly trying to help.

On 7/31/2019 at 1:27 PM, KARNUT said:

The real savings is paying off your house early. Talk about rip off, that’s where the real money is.

The real savings is paying off whichever loan has the highest interest rate first. Doesn't matter what it's attached to, it's just borrowed money costing you money.

Having grown up in the 80s when interest rates were so much higher, these 3% rates feel like free money to me. I keep refinancing my house to borrow more and avoid paying it off, that's a huge source of leverage to invest. Real estate values increasing in my area pays off a higher % of the house than my payments do. My bank's savings interest rate is nearly as high as my mortgage, even if I don't invest in something riskier for a higher return.

Just my $0.02

Edited August 2, 2019 by Daverado

Daverado · August 2, 2019

Edited August 2, 2019 by Daverado

KARNUT · August 2, 2019

The real savings is paying off whichever loan has the highest interest rate first. Doesn't matter what it's attached to, it's just borrowed money costing you money.

Having grown up in the 80s when interest rates were so much higher, these 3% rates feel like free money to me. I keep refinancing my house to borrow more and avoid paying it off, that's a huge source of leverage to invest. Real estate values increasing in my area pays off a higher % of the house than my payments do. My bank's savings interest rate is nearly as high as my mortgage, even if I don't invest in something riskier for a higher return.

Just my $0.02

My first house in the seventies was 13 percent interest, FHA going rate. When I move to Texas in 79 I had no idea how much a rip off not paying off your house early was. I can’t think of any reason I would refinance my house for. I paid off my house early and two more in the span of 30 years. At about the same cost the first one would have cost if I paid out to term. The rent from the first one combined with the payment I made on the second one paid it off early than the first. I never paid more than 1K a month out of pocket to pay for 3 Houses and one condo. That’s is the span of one house worth of mortgage. People who use home equity to finance anything but another house are double wasting money.

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Thomcat · August 3, 2019

23 hours ago, KARNUT said:

My first house in the seventies was 13 percent interest, FHA going rate. When I move to Texas in 79 I had no idea how much a rip off not paying off your house early was. I can’t think of any reason I would refinance my house for. I paid off my house early and two more in the span of 30 years. At about the same cost the first one would have cost if I paid out to term. The rent from the first one combined with the payment I made on the second one paid it off early than the first. I never paid more than 1K a month out of pocket to pay for 3 Houses and one condo. That’s is the span of one house worth of mortgage. People who use home equity to finance anything but another house are double wasting money.

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Agree+++ Been there done that.

I did have one reason to refinance from a higher rate.........to keep the payments static and extract time not cash...........e.g. 25 years remaining on a 30 year mortgage, refinance at a lower rate with same monthly payments on a new 20 year.....knocked 5 years off mortgage, etc.

Added benefits when buying a new home when builder's offer $5-$10K closing costs for using their lender with a one month skate on the first payment....always open ended because most new buyers cannot afford a cash buy....pay off in full on first payment......use equity to finance purchased of a rental.

KARNUT · August 3, 2019

Agree+++ Been there done that.

I did have one reason to refinance from a higher rate.........to keep the payments static and extract time not cash...........e.g. 25 years remaining on a 30 year mortgage, refinance at a lower rate with same monthly payments on a new 20 year.....knocked 5 years off mortgage, etc.

Added benefits when buying a new home when builder's offer $5-$10K closing costs for using their lender with a one month skate on the first payment....always open ended because most new buyers cannot afford a cash buy....pay off in full on first payment......use equity to finance purchased of a rental.

I did refinance once I remembered when I was just getting started. We remodeled. I was lucky that I was able to listen to radio while working. You can only listen to so much music. I started listening to financial shows, eventually Dave Ramsey. I didn’t realize how little it took to payoff a house early. Once my kids started school my wife started working. Her pay went towards financial security. I was lucky that my family was self employment focused. We never paid ourselves loads of money, so we were focused on the frugal lifestyle. I retired at 58, now 63. Never did without. I had all the collector cars I could handle as a hobby. And travel back and forth between two homes. My favorite hobby now is stopping at casinos playing cards, traveling back and forth. On a budget of course. My condo in myrtle Beach is least to vacation rentals costs me nothing, and is a write off. My stays at casinos is comped as well as meals. So I play cards on their money mostly. My Camry cost me 25$ dollars a day traveling. Meals usually the same traveling. I don’t post this to brag, I do it to enlighten. My own kids grew up around us and they spend like drunken fools.

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Thomcat · August 3, 2019

32 minutes ago, KARNUT said:

I did refinance once I remembered when I was just getting started. ...... I don’t post this to brag, I do it to enlighten. My own kids grew up around us and they spend like drunken fools.

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Retired at 58, now 69.....sound like we both took good some advice from Ramsey (me with a little incentive from that self help guy Wu who would pose on his yacht with girls in bikinis hawking his self help book.....saved my money being motivated by him and NOT buying his books/course).

Kids educations never cost me a dime, all full scholarships, commuting to local colleges and part time jobs to pay for their books. Now, all with good jobs and well married....even my daughter with a Summa Cum Laude in Studio Art which I had advised was useless degree....self taught computers and graphic arts and parlayed it into a career as a sought after high paid contractor........and they do spend money like drunken fools. Gross more than I ever did and periodically stick it in my face asking if we could use a few extra bucks.....fortunately we don't. No collector cars for me, drove them when they were new and that was enough for fond memories.....now it's ever on to newer ones with more gizmos.

Similar to you, worked my a$$ off when younger and able, made the right choices, and raised the children straight and narrow, so I similarly offer the old Walter Brennan tag line....."No brag, just fact".

DemonWorks · August 4, 2019

I refinanced 3 weeks after my deal. GM Financial had me at a ridiculous rate and once i received my first bill I refinanced to 3%. They pulled a shady move at financing so I have no regrets on the refinance. They want you to pay the bill for 6 months so GM Financial gets their money back from the rebate and the dealer makes their kickback.

Chris walker · August 12, 2019

I chatted with GM finance today and they said they had no early termination charges. They did say that the incentives went to the dealer and they've had several people call up stating the dealers had challenged them for refinancing. She didnt clarify what "challenged" meant. I'm guessing a civil lawsuit.....Anyone had a dealer come back to them?

Edited August 12, 2019 by Chris walker

Bob2C · August 12, 2019

Nope. No contact from dealer

scdaren · August 12, 2019

5 minutes ago, Chris walker said:

I chatted with GM finance today and they said they had no early termination charges. They did say that the incentives went to the dealer and they've had several people call up stating the dealers had challenged them for refinancing. She didnt clarify what "challenged" meant. I'm guessing a civil lawsuit.....Anyone had a dealer come back to them?

A dealer filing a civil lawsuit would surprise me -- they would end up losing hard on something like this, especially somewhere like California where there are strict consumer protections. The dealer could actually get countersued, have to pay all the customers attorney fees, and suffer other penalties provided for in consumer protection statutes.

Texas Daddy · August 13, 2019

Had to refi to get my ally gmpp refunded to me or it would go to gm finance to reduce back end of loan (no payment reduction or refund). There was no penalty to refi (I actually got a great rate and 90 days no payment), so I guess dealer will take the hit.

I felt a little bad because I really like the salesman, but finance guy cut the mileage on gmpp from 96k to 60k when he dropped the price that last time ("best I can do - how bout $1700?"). I didnt notice when I signed as they never did me wrong in past. Didnt like that at all.

It is like pulling teeth getting that protection plan cancelled even though they say you can get full refund in 60 days if you change your mind. They require payoff letter which can take a long time...

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scdaren · August 15, 2019

This is a good video on what dealerships do:

jamesonjc · January 30, 2020

On 4/2/2019 at 7:23 PM, ColoradoDaily said:

Has anyone paid off your GM Finance loan early to get a better rate? They told me I had to wait 6 months but believe that is just so they get incentives as I did not sign anything committing to that. My credit union is want to refinance me at half the rate GM gave me!!

Check your state law. It's as simple as that.

Here in new york (I am a salesman for top 5 in tri state area dealership - I personally am top ten salesperson three years running - in tri state area) if I am asked, IF I AM ASKED, I will say that in NY State we have NO early pay penalty.

But if you are going to do all that for a steak dinner why don't we just throw in the wheel well liners?

Of course you want the best deal. And of course the dealership wants to make money.

But hear this out. I am a salesman, I just want to sell a car. I don't care if you refinance after or beat up the place or throw a tantrum. I don't make a real piece of the financing part or not enough for me to care. I'm selling over 300 cars a year personally (dealership almost 4k), the $40 from the one guy bitching about $120 - as long as you drive it out of the lot do whatever the F**K you want brother!!!!!

The finance guy sees a written deal where I work. He never sees a customer until they have already agreed to a complete lease term or selling price of vehicle and rough finance payments. They are not your friend, unless it's your sister or brother - and you are close - the finance guy is not your friend. Their only job is to tell you you qualified for a 3.99 rate when they really got you 3.19 and they are pocketing the difference. Now if my credit union is 3.09 and he tells me dude make 6 payments for me and we will throw in floormats and wheel liners etc - maybe I say cool. And FOLLOW THROUGH WITH THAT - refi after 6 payments. If I am slime I refinance immediately and stick them and laugh over my $92 win

Finance wants you to buy wheel protection packages and key replacement warranty....

Please.

The sales guy just wants you to pick a darn truck out and hammer it as low as it takes for you to say yes. How well we play our managers is how good of a deal you get . Of course - rebates, incentives, taking a car in stock - all play a part. After that they get the snake to start lying......

It is about ethics and morals. Yes _ I am a car salesman.

The sales guy does not care as long as you are buying something. Just please - for our sake and my kids sake - buy something if you are gonna make a big show of things. Find a sales guy you want to buy from and lay it out. FIND A VOLUME DEALERSHIP....... Don't waste your time even visiting another....

Dunn · January 30, 2020

On 4/7/2019 at 6:48 AM, duquephart said:

It is amazing that this needs to be brought up time after time on boards as sophisticated as this. The first, foremost, cardinal, etc. rule in price negotiations at a car dealer is to keep all transactions separate. The phrase "we'll talk about step two (three, four, etc.) after we complete step one" is your best friend. Within fifteen minutes of arriving at a dealership the salesman knows way too much about the typical dope: what he wants, what he is trading, what his ideal payment is, his time frame, etc. Don't be that guy. This is called "qualifying" and is standard procedure ----- they are way better at selling than you are at buying so you need to eliminate as much of their advantage as possible.

exactly.....if you do something every day your bound to get good at doing it.....vs someone who does it once every few or five years....this time when I bought I did everything separate and thru emails and texts, never even went to dealer cept to pick up truck on agreed price.....by far the easiest way imo....It was on my time not their time, and I wasn't stuck at their dealership haggling 4 hours.....he cant see me, doesn't know if I have another deal, cant see my expressions.....takes emotion completely out of equation...I researched about 2 months but once I decided this all took about a week but I was talking to multiple dealers at same time so

it is only way to buy for me.....

of course they moved numbers around and eventually tried to get an extra $1500 night b4 I went in but I caught it, and it was reversed back to our original agreement but fact I was at home, work, or play while this was happening was way better than being at dealership going thru all of this...

I went to 3 dealerships total just to see trucks physically in person....spent all of 30 min at all 3