GM Financing - Early refinance

econometrics · July 30, 2019

1 hour ago, Dmart said:

If you wait the 6 months to refinance you'll have to pull your credit TWICE for the purchase of one vehicle. That imo is a bigger deal than the money you'll be losing especially if you plan on taking out a loan or line of credit shortly after.

Bingo.

13nick13 · July 30, 2019

1 hour ago, Dmart said:

If you wait the 6 months to refinance you'll have to pull your credit TWICE for the purchase of one vehicle. That imo is a bigger deal than the money you'll be losing especially if you plan on taking out a loan or line of credit shortly after.

Best point yet. I guess then you leverage whether or not 1-3 extra points on your score is worth the money you save after figuring the extra interest.

scdaren · July 30, 2019

1 hour ago, Dmart said:

If you wait the 6 months to refinance you'll have to pull your credit TWICE for the purchase of one vehicle. That imo is a bigger deal than the money you'll be losing especially if you plan on taking out a loan or line of credit shortly after.

You'll have to do a second credit pull whether you refi in a week or in 6 months.

Definitely worth the few thousand for a rebate. The couple points off you score is not going to affect anything, unless you have a pretty dicey credit situation to start with.

Dmart · July 30, 2019

8 minutes ago, scdaren said:

You'll have to do a second credit pull whether you refi in a week or in 6 months.

Definitely worth the few thousand for a rebate. The couple points off you score is not going to affect anything, unless you have a pretty dicey credit situation to start with.

True, however if you do the second credit pull within 14 days of the first pull, it won't affect you twice per se

Daverado · July 30, 2019

23 hours ago, 13nick13 said:

#2... THE DEALERSHIP IS HELPING YOU TOO! this is important... if the rebate is $1500 to go through gm financial, and you have to keep the loan for 6 months, you only are going to pay like $150-$200 MORE in interest in that 6 months than you would have at a better rate at a different bank.

See here's my problem... I think you're not doing the math, or you're not being honest. And that's what this thread is really about.

There's no way you can insist the interest difference is only $150-200. Because that depends on the details of the loan.

I financed 100% of my HC. $66,425. The dealer offered 6.99% financing. I got 3.24% from my local credit union. The financing rebate at the time was $1000.

The math isn't complicated, in fact websites like https://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx will do it for you.

Total interest in 6 months:

6.99%: $2240

3.24%: $1035

Difference: $1205. Doing the math tells me that's a lot more than $150-200.

So you really need to stop spreading your misinformation. Dealers aren't doing anyone any favors here.

NO PENALTY FOR EARLY REFINANCE!

scdaren · July 30, 2019

5 minutes ago, Daverado said:

See here's my problem... I think you're not doing the math, or you're not being honest. And that's what this thread is really about.

There's no way you can insist the interest difference is only $150-200. Because that depends on the details of the loan.

I financed 100% of my HC. $66,425. The dealer offered 6.99% financing. I got 3.24% from my local credit union. The financing rebate at the time was $1000.

The math isn't complicated, in fact websites like https://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx will do it for you.

Total interest in 6 months:

6.99%: $2240

3.24%: $1035

Difference: $1205. Doing the math tells me that's a lot more than $150-200.

So you really need to stop spreading your misinformation. Dealers aren't doing anyone any favors here.

NO PENALTY FOR EARLY REFINANCE!

Yep, here's my math -- $57,229 financed on a 72 month loan.

This is what 6 months of interests costs on:

6.99% GM loan: $1,943.62

2.85% CU loan: $789.44

I saved $1,154.18 by refinancing immediately instead of waiting 6 months.

killramos · July 31, 2019

On 7/29/2019 at 4:38 PM, 13nick13 said:

when you get 0% you give up all the rebates though. So really you only have the illusion of paying less.

That isn't necessarily true, depends on if the rebates are stackable or not.

For example, I just got 0% for 72mo ( way longer than I would usually consider financing but hey 0% ia 0% ) with $0 down, dealer invoice pricing +1.5%, less $2,650 GM credit, $500 Costco gift card and i negotiated a thrown in tonneau cover as well.

If i didn't take the financing i could have had $3,600 taken off the truck instead of that incentive, but by my math for each 1% over 0 the i would have otherwise financed the truck the 0% interest promo is worth a little over $4,200 so I will take the finance and let my money earn a return elsewhere instead.

All I am trying to say is you need to take each deal at face value rather than generalize.

UGADawgs · July 31, 2019

The $1500 rebate from GM should be for getting a competitive rate for the duration of the loan. At least that's the way GM markets the rebate.

The fact that dealerships mark up that rate and lie about the whole thing is shady as sh!t. When a customer gets a 7.29% rate with a 800+ credit score and can walk into their credit union the next day and quality for 2.49%, it's a no brainier people hate dealerships, the car buying process, and anyone who tries to defend it or gaslight us about our experience.

Someone please end this thread.

Daverado · July 31, 2019

On 7/29/2019 at 10:03 PM, Dmart said:

If you wait the 6 months to refinance you'll have to pull your credit TWICE for the purchase of one vehicle. That imo is a bigger deal than the money you'll be losing especially if you plan on taking out a loan or line of credit shortly after.

So.. one comment I will make on this.. First, yes you do get a second hard pull on your credit for the new loan, and that is not ideal.

You also get a pretty hefty paid-in-full loan account on your credit report in your favor though. As long as you're good at paying bills on time lol.

I think the benefit of that second loan for the same money probably balances out or even outweighs the credit check, but I am only speculating on that. It's only six months after all. If you don't have plans to be using your credit for other things in the near future, that paid-off loan should benefit your score longer than the credit check will ding it I would guess.

-Daver

tbarn · July 31, 2019

17 hours ago, Daverado said:

See here's my problem... I think you're not doing the math, or you're not being honest. And that's what this thread is really about.

There's no way you can insist the interest difference is only $150-200. Because that depends on the details of the loan.

I financed 100% of my HC. $66,425. The dealer offered 6.99% financing. I got 3.24% from my local credit union. The financing rebate at the time was $1000.

The math isn't complicated, in fact websites like https://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx will do it for you.

Total interest in 6 months:

6.99%: $2240

3.24%: $1035

Difference: $1205. Doing the math tells me that's a lot more than $150-200.

So you really need to stop spreading your misinformation. Dealers aren't doing anyone any favors here.

NO PENALTY FOR EARLY REFINANCE!

Was a 0% alternative not offered? Usually it's xxx rebate or 0% for x amount of time.

13nick13 · July 31, 2019

18 hours ago, Daverado said:

See here's my problem... I think you're not doing the math, or you're not being honest. And that's what this thread is really about.

There's no way you can insist the interest difference is only $150-200. Because that depends on the details of the loan.

I financed 100% of my HC. $66,425. The dealer offered 6.99% financing. I got 3.24% from my local credit union. The financing rebate at the time was $1000.

The math isn't complicated, in fact websites like https://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx will do it for you.

Total interest in 6 months:

6.99%: $2240

3.24%: $1035

Difference: $1205. Doing the math tells me that's a lot more than $150-200.

So you really need to stop spreading your misinformation. Dealers aren't doing anyone any favors here.

NO PENALTY FOR EARLY REFINANCE!

dude... no offense.. but your math is wrong... financing 66,425 at 6.99% is not a 2240 payment. go back and check that again. its way off. Also... i do this 6 days a week dude. i know my math is good. i'm trying to be helpful and show you how it ACTUALLY works. my math is good

13nick13 · July 31, 2019

18 hours ago, Daverado said:

See here's my problem... I think you're not doing the math, or you're not being honest. And that's what this thread is really about.

There's no way you can insist the interest difference is only $150-200. Because that depends on the details of the loan.

I financed 100% of my HC. $66,425. The dealer offered 6.99% financing. I got 3.24% from my local credit union. The financing rebate at the time was $1000.

The math isn't complicated, in fact websites like https://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx will do it for you.

Total interest in 6 months:

6.99%: $2240

3.24%: $1035

Difference: $1205. Doing the math tells me that's a lot more than $150-200.

So you really need to stop spreading your misinformation. Dealers aren't doing anyone any favors here.

NO PENALTY FOR EARLY REFINANCE!

also.. if you could not be such a little whiner about how im on here "spreading misinformation" when you cant even calculate simple interest on a loan. sorry guy but sounds like you need to be put in your place because you are talking a lot for someone with the wrong answer. i am here trying to help you knuckleheads understand the truth of whats happening. u can either listen and know how it works, or interrupt with your own misinformed opinion and continue to not really understand. up to you, but i'm done reading your comments about how im trying to "mislead people"

13nick13 · July 31, 2019

5 hours ago, UGADawgs said:

The $1500 rebate from GM should be for getting a competitive rate for the duration of the loan. At least that's the way GM markets the rebate.

The fact that dealerships mark up that rate and lie about the whole thing is shady as sh!t. When a customer gets a 7.29% rate with a 800+ credit score and can walk into their credit union the next day and quality for 2.49%, it's a no brainier people hate dealerships, the car buying process, and anyone who tries to defend it or gaslight us about our experience.

Someone please end this thread.

Everything you buy in life is marked up. start yelling about the grocery store marking stuff up too. maybe it will change something there. Maybe whatever you do, they should stop marking up their services and just do everything at cost. would that make things better for you? or is that kinda how an economy and capitalism works?

13nick13 · July 31, 2019

18 hours ago, scdaren said:

Yep, here's my math -- $57,229 financed on a 72 month loan.

This is what 6 months of interests costs on:

6.99% GM loan: $1,943.62

2.85% CU loan: $789.44

I saved $1,154.18 by refinancing immediately instead of waiting 6 months.

im sorry, but you used bad information. At 6.99 your payment for 72 months would have been around $978. at 2.85 the payment is $867. that is financing 57,252.00 because thats as close to your numbers as i can get without spending a ton of time recreating your deal. your numbers aren't right though also my man. i'm telling you guys... i know how to do this math and you are doing it WAY wrong. so wrong in fact i dont even know how you are getting the answers so wrong

scdaren · July 31, 2019

11 minutes ago, 13nick13 said:

im sorry, but you used bad information. At 6.99 your payment for 72 months would have been around $978. at 2.85 the payment is $867. that is financing 57,252.00 because thats as close to your numbers as i can get without spending a ton of time recreating your deal. your numbers aren't right though also my man. i'm telling you guys... i know how to do this math and you are doing it WAY wrong. so wrong in fact i dont even know how you are getting the answers so wrong

Lol... are you really a finance manager? Or just a troll? Because I don't think you understand how interest works. We are not talking about the monthly payment, we are talking about the cost of interest.

You see, for each payment you make, a portion goes to the principal (the money you owe the bank) and a portion goes to the bank (the money you pay the bank for the privilege of borrowing money from them).

Over six months, at 6.99%, the portion of my payments that would have gone to the bank to keep, and not to pay down the loan, would have been $1943.62. On the 2.85% loan I got, that total interest paid over 6 payments will be $789.44.

Do you really not understand how the cost of interest works? If you are in truth a finance manager, that blows my mind. I know, math is hard. Here, let me just break down the first payment:

At 6.99% for 72 months, monthly payment is $975.42. Of that, $642.06 goes to my principal, and $333.36 goes to the bank.

At 2.85% for 72 months, monthly payment is $865.68. Of that $729.76 goes to my principal, and $135.92 goes to the bank.

Just on the first month, I have saved $197.44 (ie 333.36 - 135.92 = 158.52).

Edit: corrected my numbers.

Edited July 31, 2019 by scdaren