GM Financing - Early refinance

jlong1984 · June 29, 2019

Just got a $50 check from GMF. I too, did not make single payment before refinancing with Penfed. Went from an almost 7% interest rate with GM to 3.49 with Penfed.

jlong1984 · June 29, 2019

On 6/22/2019 at 8:36 AM, LumberMack said:

My ordered RST truck is almost at my local dealer. Can someone confirm that both "Purchase Bonus Cash" of $2750 and "Package Cash Allowance" of 2k are only applicable if you finance with GM Financial? Ive already started the process of applying for a loan from my local credit union. But if I lose this $4750, I guess it's worth it to do the GM loan and just refinance shortly thereafter. I just didnt want to go through the hassle of refinancing.

Was also wondering how some people were getting up to 12-13k off sticker (even top trims like AT4s)? My truck is currently listed with $9200 off. By ordering the truck, I dont really have room for much haggling/negotiation do I?

Found it interesting too that my truck isnt scheduled to reach the dealer until late next week, yet the truck is listed for sale on their website.

Thanks!

Brian

I got almost $14,000 off on my SLT X31 because it was a retired service loaner with 2,500 miles on it. Still qualified for all the new truck rebates from GM, plus the dealer chipped in a couple grand since it had some miles on it.

duquephart · June 29, 2019

31 minutes ago, jlong1984 said:

I got almost $14,000 off on my SLT X31 because it was a retired service loaner with 2,500 miles on it. Still qualified for all the new truck rebates from GM, plus the dealer chipped in a couple grand since it had some miles on it.

"it had some miles on it"

Also known as "used."

duquephart · June 29, 2019

On 6/27/2019 at 9:05 PM, ugaDAWGS09 said:

I bought a GMC Sierra today and the finance manager asked me to make sure I pay 6 payments at 6.99% before refinancing. I asked is it in the paperwork or will GM penalize me if I dont and he said he hasn't heard of that before. The salesman said he had heard of GM sending people a 1k dollar bill. Ever heard of this ? I bought the extended warranty so dont want to do the wrong thing and mess up my relationship with the dealer. 6.99% with a credit score of 835

They lie to you, straight to your face, and you're worried about messing up your relationship?

ugaDAWGS09 · June 29, 2019

I honestly wouldn't have an issue if it were still 3 months like the salesman had been telling me . When I got to the finance manager and he told me no its 6 months then I'm only saving maybe 250 to 300 dollars. I wonder if a credit union will still finance me for a new vehicle since I haven't made a payment. Best rates I've saw are 2.69 for 48 months or 2.99 for 60 months for new vehicle.

jlong1984 · June 29, 2019

1 hour ago, duquephart said:

"it had some miles on it"

Also known as "used."

Still looks new, still smells new, it hadn't been titled, and I got a great deal on it. I'm happy.

scdaren · June 29, 2019

20 minutes ago, ugaDAWGS09 said:

I honestly wouldn't have an issue if it were still 3 months like the salesman had been telling me . When I got to the finance manager and he told me no its 6 months then I'm only saving maybe 250 to 300 dollars. I wonder if a credit union will still finance me for a new vehicle since I haven't made a payment. Best rates I've saw are 2.69 for 48 months or 2.99 for 60 months for new vehicle.

Yes they should no problem. You can do GM financing then go refi using MSRP. Not sure how long you have to do that, at least a month or two with most CU.

UGADawgs · June 30, 2019

On 6/29/2019 at 3:06 PM, ugaDAWGS09 said:

I honestly wouldn't have an issue if it were still 3 months like the salesman had been telling me . When I got to the finance manager and he told me no its 6 months then I'm only saving maybe 250 to 300 dollars. I wonder if a credit union will still finance me for a new vehicle since I haven't made a payment. Best rates I've saw are 2.69 for 48 months or 2.99 for 60 months for new vehicle.

Shouldn't make a difference. It's a refi classification. My credit union classified mine as a refi since they weren't used at point of purchase. Still got 2.49%

Edited June 30, 2019 by UGADawgs

13nick13 · July 29, 2019

I can settle this for you all once and for all. I'm a finance manager at a Chevy dealer in Michigan. This is EXACTLY what is happening with your rebates and rates. First off, if you qualify for GM Financials A1 tier of credit, the interest rate they give the dealership is 4.99%. What the dealership does, is mark that 4.99% up a maximum of 2 points to 6.99%. The finance department gets to profit from the increase of rate from 4.99% to 6.99% but ONLY if the customer doesn't refinance within a certain amount of time. That amount of time USED to be 3 months. When GM Financial noticed that dealers were signing up all these 850 credit scores at 6.99% and telling the customer to refi after 3 months, they changed their policy to 6 months. If the customer refinances before that 6 month period, the dealership gets charged back the amount they made by increasing the rate. NOW BEFORE YOU FREAK OUT... 2 things.... #1.... try to remember we all go to work to make money... #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. So in 6 months, say you pay $200 more in interest... well the rebate was $1500, so you STILL SAVED $1300 from the rebate! So when a dealership tells you to refinance in 6 months, that's them telling you how to get out of that loan in a way that allows the dealership to keep their kickback. MAIN POINT... do the math... if you want to deal with refinancing after 6 months, it makes sense... just DON'T FORGET TO REFINANCE.... also... keep the loan 6 months... i promise you the dealership hooked u up by telling you to refinance the loan.

scdaren · July 29, 2019

4 minutes ago, 13nick13 said:

I can settle this for you all once and for all. I'm a finance manager at a Chevy dealer in Michigan. This is EXACTLY what is happening with your rebates and rates. First off, if you qualify for GM Financials A1 tier of credit, the interest rate they give the dealership is 4.99%. What the dealership does, is mark that 4.99% up a maximum of 2 points to 6.99%. The finance department gets to profit from the increase of rate from 4.99% to 6.99% but ONLY if the customer doesn't refinance within a certain amount of time. That amount of time USED to be 3 months. When GM Financial noticed that dealers were signing up all these 850 credit scores at 6.99% and telling the customer to refi after 3 months, they changed their policy to 6 months. If the customer refinances before that 6 month period, the dealership gets charged back the amount they made by increasing the rate. NOW BEFORE YOU FREAK OUT... 2 things.... #1.... try to remember we all go to work to make money... #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. So in 6 months, say you pay $200 more in interest... well the rebate was $1500, so you STILL SAVED $1300 from the rebate! So when a dealership tells you to refinance in 6 months, that's them telling you how to get out of that loan in a way that allows the dealership to keep their kickback. MAIN POINT... do the math... if you want to deal with refinancing after 6 months, it makes sense... just DON'T FORGET TO REFINANCE.... also... keep the loan 6 months... i promise you the dealership hooked u up by telling you to refinance the loan.

Here is the problem I have with this:

When you refinance a car, banks and credit unions will only loan you money up to the value of that vehicle.

So if I take the GM loan at 6.99% with the rebate (which I did), and go to my credit union within a month or so to refi (which I did), they will accept the window sticker MSRP as the valuation of the vehicle, and will give me a loan up to that value plus 10%.

On the other hand, if I wait 6 months, they are not going to accept that window sticker -- they are going to look at Kelley blue book valuations for my loan. Based on that valuation, unless I put a bunch of money down to buy the truck or got a screaming good deal on it, my loan application is going to get rejected for lack of collateral, and I'm stuck with the overpriced loan.

I have zero sympathy for the dealers on this. I am buying a truck from them, not a loan. They are a dealership, not a bank. This is a business transaction, based wholly within the 4 corners of that contract I signed, and it specifically states I have no prepayment penalty -- that is an integral part of the bargain I made when I bought the truck.

They are -- without disclosing to the buyer -- pretending to give you a discount but really hitting you on the back end with an overpriced loan. Many people just take that rate and pay it, thinking they got a discount on their truck, when it's really just a scheme for the dealer to make some extra profit behind the scenes. This is not good behavior for consumers, and frankly, should be illegal. It's unfair to consumers, and unfair to other automakers and dealers who are not engaging in such backhanded practices.

Bob2C · July 29, 2019

Here is the problem I have with this:

When you refinance a car, banks and credit unions will only loan you money up to the value of that vehicle.

So if I take the GM loan at 6.99% with the rebate (which I did), and go to my credit union within a month or so to refi (which I did), they will accept the window sticker MSRP as the valuation of the vehicle, and will give me a loan up to that value plus 10%.

On the other hand, if I wait 6 months, they are not going to accept that window sticker -- they are going to look at Kelley blue book valuations for my loan. Based on that valuation, unless I put a bunch of money down to buy the truck or got a screaming good deal on it, my loan application is going to get rejected for lack of collateral, and I'm stuck with the overpriced loan.

I have zero sympathy for the dealers on this. I am buying a truck from them, not a loan. They are a dealership, not a bank. This is a business transaction, based wholly within the 4 corners of that contract I signed, and it specifically states I have no prepayment penalty -- that is an integral part of the bargain I made when I bought the truck.

They are -- without disclosing to the buyer -- pretending to give you a discount but really hitting you on the back end with an overpriced loan. Many people just take that rate and pay it, thinking they got a discount on their truck, when it's really just a scheme for the dealer to make some extra profit behind the scenes. This is not good behavior for consumers, and frankly, should be illegal. It's unfair to consumers, and unfair to other automakers and dealers who are not engaging in such backhanded practices.

Exactly. Got almost 10k in rebates but financed through gm financial and the cost of interest after the loan was close 12k as stated on their paperwork. Perfect credit and they gave me 6.69%. If they came in reasonably close to my credit union I would have kept it. Got 2.99%. That is a lot of money in my pocket. Never made a payment to gm. Refinanced the same week

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smrr1 · July 29, 2019

Yep. Do not feel bad for the dealer at all. If the dealer and gm weren't raping people to begin with people would finance and stay with them. The hell with them. I took the rebate and 4.99 after fighting for it. Then i refinanced the day my license plates showed up. Never made a pmt to gm. Got a refund check for $50. I sleep well at night.

13nick13 · July 29, 2019

2 minutes ago, Bob2C said:

Exactly. Got almost 10k in rebates but financed through gm financial and the cost of interest after the loan was close 12k as stated on their paperwork. Perfect credit and they gave me 6.69%. If they came in reasonably close to my credit union I would have kept it. Got 2.99%. That is a lot of money in my pocket.

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See what you are doing is saying things without doing the math. You are not correct that you would pay less money. If you refinance in 6 months, you pay less money PERIOD. tell me the selling price of your truck and i'll do the math for you. i'm not being rude. i just want you to understand.

scdaren · July 29, 2019

3 minutes ago, 13nick13 said:

See what you are doing is saying things without doing the math. You are not correct that you would pay less money. If you refinance in 6 months, you pay less money PERIOD. tell me the selling price of your truck and i'll do the math for you. i'm not being rude. i just want you to understand.

Okay, so as the finance manager, are you going to guarantee to your buyer that they will in fact be able to refi in 6 months -- and specifically that the truck will hold enough value to fully cover the total owed on their current loan, based on the refi bank's underwriting standards? Or that the refi rates won't go up?

Of course not. By asking people to wait 6 months, you are playing the odds that at that point they won't be able to refi, or they will already be accustomed to their overpriced payment and will forget all about it, and at that point, with the interest they are paying, it's going to be years before they are above water on that loan and can refi it. And the longer the term, the more likely that scenario pays out.

13nick13 · July 29, 2019

8 minutes ago, scdaren said:

Here is the problem I have with this:

When you refinance a car, banks and credit unions will only loan you money up to the value of that vehicle.

So if I take the GM loan at 6.99% with the rebate (which I did), and go to my credit union within a month or so to refi (which I did), they will accept the window sticker MSRP as the valuation of the vehicle, and will give me a loan up to that value plus 10%.

On the other hand, if I wait 6 months, they are not going to accept that window sticker -- they are going to look at Kelley blue book valuations for my loan. Based on that valuation, unless I put a bunch of money down to buy the truck or got a screaming good deal on it, my loan application is going to get rejected for lack of collateral, and I'm stuck with the overpriced loan.

I have zero sympathy for the dealers on this. I am buying a truck from them, not a loan. They are a dealership, not a bank. This is a business transaction, based wholly within the 4 corners of that contract I signed, and it specifically states I have no prepayment penalty -- that is an integral part of the bargain I made when I bought the truck.

They are -- without disclosing to the buyer -- pretending to give you a discount but really hitting you on the back end with an overpriced loan. Many people just take that rate and pay it, thinking they got a discount on their truck, when it's really just a scheme for the dealer to make some extra profit behind the scenes. This is not good behavior for consumers, and frankly, should be illegal. It's unfair to consumers, and unfair to other automakers and dealers who are not engaging in such backhanded practices.

if you want the rebate, they reserve the right to set your interest rate. if you don't want to hassle with refinancing, don't take the $1500 rebate. An honest dealer would explain to you why they need to wait 6 months. I always do. I straight up tell people they will charge us back and I show them how much the extra interest pays. i admit that I don't tell them when their rate is marked up, but i give them clear instructions on how and when to refinance. You can be as difficult about it as you want and be on here beating your chest against dealerships, but i will prove you wrong mathematically EVERY TIME. I do this every day. I know this better than you do. And i'm not trying to offend you. You seem old school, and I deal with that all the time. I just want you to understand that unless you don't refinance, the dealership is doing you a solid telling you to refinance the loan. I've never had a customer be mad at me for making money when they get to keep 1300 of their 1500 rebate and i'm honest with them about where the money goes.