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      01-21-2021, 11:09 PM   #1
Beemertj
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Funny thing from a Dealer

So, about to close the sale on our house and BAM! A tree falls on our Van! Oh man, was it flattened like a pancake. So, rather than wait till we complete our move to a state with sales tax, we hurry up and buy our new car....just a couple weeks early. So, all we need is to borrow $$$ for about 2.5 weeks. Sounds good, great credit (+800) and do a quick deal with the dealer for a loan with 2.9% money and it should be paid off in in a few weeks. We get a great $3000 discount for using BMWFS to finance and get a great deal on a program car... No problem.

So, when we get to Finance, he tells me that we have to make 3 payments before we send a check to close the loan.

That was new to me?.....So, after 25 minutes of him trying to convince us our odd REQUIREMENT and my wife going through all the forms...NOT seeing this written anywhere.., I finally say to him... "So, what your telling me is...There is nothing in writing really to force-compel me to do make 3x payments?"

He eventually agreed and said, "um,.....yes, you TECHNICALLY don't have to".

What the heck was that all about?


ps..if this is in the wrong forum, I apologize.
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Last edited by Beemertj; 01-22-2021 at 07:44 AM..
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      01-22-2021, 02:00 AM   #2
jg05
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Sorry about the circumstance but sounds like everyone is ok so that’s the most important part.

The finance manager should have been upfront. Basically, the dealership makes money on the financing (BMWFS pays them for originating the loan). If you pay it off within 3 months, they have to repay the revenue they make on that loan to BMW Financial Services. There should not be any prepayment penalty for you, the borrower.

It’s more of a courtesy that the dealer should mention for their benefit and ask for you to understand but not make it sound like there is a contractual obligation with a prepayment penalty.

They moved a car they probably wouldn’t have sold otherwise. They should probably just be happy with that.

Make sure to tell your mortgage company about the new debt ASAP, they’re going to see it anyway.

Good luck with your new home!!
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      01-22-2021, 07:39 AM   #3
Beemertj
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Ahh! So that’s why. I sure wish they hadn’t been so silly about it. Wow. That room got pretty small while the the two of us felt as though they were being deceptive.

All they had to do was tell us that!

Who would have guessed that a BMW dealer can be as silly as common used car dealer.

So we went round and round for about $250 in finance charges (to me)? How silly.

Thank you for your reminder about the loan...The first thing I did before we bought the car was to get a new letter of pre-approval from USAA for the new home loan. They said our debt to owe ratio would be no problem with the added car loan. We have very very little debt.

It’s really a shame they didn’t mention their real financial concerns rather than veil it as a “requirement”. My wife has an MBA and kept whispering about it till I simply stepped up the heat.
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      01-29-2021, 12:30 AM   #4
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Haha...glad it worked out. I've heard this many of times from people. Auto loans never carry a prepayment penalty. And it's often worth it to finance a car with the dealer or their lender to get a better deal/incentives; after that refi with your preferred lender or payoff. They plan to make money off the interest assuming that you keep the loan for its term that's why they offer the incentives. Most places need you to hold onto the loan for 3-6 months so they get their cut. I've always wondered if they ever know in sales/finance what happens after the sale.

BTW what did you get?
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      01-29-2021, 08:09 AM   #5
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Quote:
Originally Posted by Beemertj View Post
Ahh! So that’s why. I sure wish they hadn’t been so silly about it. Wow. That room got pretty small while the the two of us felt as though they were being deceptive.

All they had to do was tell us that!

Who would have guessed that a BMW dealer can be as silly as common used car dealer.

So we went round and round for about $250 in finance charges (to me)? How silly.

Thank you for your reminder about the loan...The first thing I did before we bought the car was to get a new letter of pre-approval from USAA for the new home loan. They said our debt to owe ratio would be no problem with the added car loan. We have very very little debt.

It’s really a shame they didn’t mention their real financial concerns rather than veil it as a “requirement”. My wife has an MBA and kept whispering about it till I simply stepped up the heat.
Glad things worked out for you but yes, would be smarter to be honest with people but not always the case in car purchase transactions unfortunately. I am sure a lot of people just get the financing for the incentive and even if the FI person is honest, they still pay off the loan right away. Again, for the dealer in your case, they should have just been happy to move a car they wouldn’t have sold that day.

Most importantly, enjoy the new car and your new home!! Glad the purchase didn’t affect your mortgage. You would be surprised at how often people buy cars while waiting to close on a home and it ends up jeopardizing their purchase. Happy that wasn’t the case for you!
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      01-29-2021, 08:40 AM   #6
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I think the problem is that the $3000 you received off of the vehicle by going through financing is what the dealer will lose if the loan is paid off within the three months.

I wonder if you paid off most of the loan (loan amount - 3 payments) if that would still keep the dealer getting the $3K, but you won't be paying so much interest?
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      01-29-2021, 01:12 PM   #7
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Quote:
Originally Posted by badcowboy View Post
I think the problem is that the $3000 you received off of the vehicle by going through financing is what the dealer will lose if the loan is paid off within the three months.

I wonder if you paid off most of the loan (loan amount - 3 payments) if that would still keep the dealer getting the $3K, but you won't be paying so much interest?
Typically it is as long as the loan is active and doesn't have anything to do with the outstanding balance of the loan.
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      02-06-2021, 07:12 AM   #8
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I paid all but 25k ish on my bmw, finance guy tells me if I pay off loan within six months I have to repay $2500 credit. We do deal. I call national bmw finance number and ask them. They say you don’t pay, the dealer pays the credit back. My first payment was 20k. I just wish the F&I folks were honest and don’t lie. I am tempted to just pay all off because he lied., what do you think?
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      02-06-2021, 10:02 AM   #9
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Quote:
Originally Posted by gqgambler View Post

BTW what did you get?
CPO car — 2020 X5 40i. It had 4010 miles on her.
The car is covered till 100k through BMW and he took 20% off book rate to sell the warranty. (My guess is he saw the profit margin drop in about a month and realized without a warranty purchase, not might make much otherwise.). Happy with everything, except the deception.
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