GM Financing - Early refinance

13nick13 · July 29, 2019

1 minute ago, scdaren said:

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.

i understand that concern too. My answer to that is that i work with 1 bank out of 32 that has higher interest rates for current and 1 year prior model years. If you are smart, you will refinance with a credit union and they almost always advertise their rates on their websites. All the credit unions I work with have the same rates for new and used cars if they are current or last years model year vehicles. I do understand what your concern is, but unless you drive 30,000 miles in 6 months, thats not going to be an issue.

13nick13 · July 29, 2019

i'll reiterate... GM FINANCIAL GOT MAD AT DEALERSHIPS FOR TELLING YOU ALL TO DITCH THE LOAN IN 3 MONTHS... how does that not indicate dealerships trying to do you a solid by telling you how to avoid unnecessary interest... You are only mad that they got to make some money and you lost $200 of your $1500. I've never gotten a call from a customer who was told they could not refinance at a better rate after 6 months. Not ONE SINGLE TIME. I am all about transparency. I understand that not all dealers are and that can leave a bad taste in your mouth. But what i'm telling you is mathematically sound. If you refinance in 6 months, you still pay about $1300 less. The only thing that could change that is if you absolutely drive the wheels off of it, or the car market takes a huge sh## and the banks raise interest rates. but most people are willing to bet 1300 on the stability of the american auto industry for 6 months.

scdaren · July 29, 2019

3 minutes ago, 13nick13 said:

i'll reiterate... GM FINANCIAL GOT MAD AT DEALERSHIPS FOR TELLING YOU ALL TO DITCH THE LOAN IN 3 MONTHS... how does that not indicate dealerships trying to do you a solid by telling you how to avoid unnecessary interest... You are only mad that they got to make some money and you lost $200 of your $1500. I've never gotten a call from a customer who was told they could not refinance at a better rate after 6 months. Not ONE SINGLE TIME. I am all about transparency. I understand that not all dealers are and that can leave a bad taste in your mouth. But what i'm telling you is mathematically sound. If you refinance in 6 months, you still pay about $1300 less. The only thing that could change that is if you absolutely drive the wheels off of it, or the car market takes a huge sh## and the banks raise interest rates. but most people are willing to bet 1300 on the stability of the american auto industry for 6 months.

Okay. Why even tie the rebate to the financing at all?

It's specifically to allow dealership to compete by offering a larger "dealer discount", knowing that everyone will take the rebate and they will make that money up on the back end. In my mind, these tactics are the definition of unfair competition, and one of many reasons people hate dealers and car shopping.

Zero. Sympathy. If you are discounting vehicles to the point you can't make a profit without undisclosed rate hikes on financing, that's not my problem.

13nick13 · July 29, 2019

On 6/29/2019 at 2:08 PM, duquephart said:

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

IF they tell you that you HAVE TO make 6 payments or face a penalty, THEN they are lying 100%. you dont sign anything that says that and the only person who gets charged a penalty if you refinance early is the dealership.

scdaren · July 29, 2019

8 minutes ago, 13nick13 said:

i'll reiterate... GM FINANCIAL GOT MAD AT DEALERSHIPS FOR TELLING YOU ALL TO DITCH THE LOAN IN 3 MONTHS... how does that not indicate dealerships trying to do you a solid by telling you how to avoid unnecessary interest... You are only mad that they got to make some money and you lost $200 of your $1500. I've never gotten a call from a customer who was told they could not refinance at a better rate after 6 months. Not ONE SINGLE TIME. I am all about transparency. I understand that not all dealers are and that can leave a bad taste in your mouth. But what i'm telling you is mathematically sound. If you refinance in 6 months, you still pay about $1300 less. The only thing that could change that is if you absolutely drive the wheels off of it, or the car market takes a huge sh## and the banks raise interest rates. but most people are willing to bet 1300 on the stability of the american auto industry for 6 months.

Moreover, is $200 not a big deal? Sure seems like it is every time I have asked a dealer to throw in just a bit more on my trade-in, or throw in some floormats on the house.

scdaren · July 29, 2019

12 minutes ago, 13nick13 said:

IF they tell you that you HAVE TO make 6 payments or face a penalty, THEN they are lying 100%. you dont sign anything that says that and the only person who gets charged a penalty if you refinance early is the dealership.

Your JOB is specifically to maximize profit to the dealership through financing, extended warranties, service plans, and other dealer adds. Down to every last dollar. This is what you are paid to do.

My job is to minimize the price I pay for that truck, and to get the best value that I can. So yes, I'm going to take the rebate, refi within a week, buy a 125k seven year ext warranty through my credit union for $1000, and gap insurance from them for $250. Again, a few hundred dollars extra in my pocket is going to buy wife and I a nice steak dinner, or help pay for the wheel well liners GM should have included on my truck to begin with.

It's not personal, it's business. If some people aren't smart enough to do all that, or too lazy, that's on them. Math is hard, right? I'm sure not going to shed a tear for a dealer not getting a kickback on overpriced financing because they advertised too big of a discount, and I didn't play into their tie-the-rebate-to-the-financing scheme.

Edited July 29, 2019 by scdaren

13nick13 · July 29, 2019

4 minutes ago, scdaren said:

Okay. Why even tie the rebate to the financing at all?

It's specifically to allow dealership to compete by offering a larger "dealer discount", knowing that everyone will take the rebate and they will make that money up on the back end. In my mind, these tactics are the definition of unfair competition, and one of many reasons people hate dealers and car shopping.

Zero. Sympathy. If you are discounting vehicles to the point you can't make a profit without undisclosed rate hikes on financing, that's not my problem.

you don't think we wish they didn't do that at all? don't you think we would like gm financial to have competitive rates? you don't think every dealer in the country wishes there were better incentives on the new body style silverado's? The reason this happens is because you want EVERYTHING. You want ALL THE REBATES, AND you want the car at invoice... the dealership HAS TO MAKE MONEY. I don't expect you to understand or believe me but you would be SHOCKED if you saw on average how much we make selling a car. I am not asking you for sympathy. what i'm telling you is that you don't have a good understanding about how car dealerships make money. Your opinions were formed in the before the last 10 years most likely and before the internet made pricing so much more transparent. I understand your concerns, but at this point you are really just being stubborn. If you knew me and came to my store, and had it explained right from jump street that you just have to take this dumb rate for 6 months and then you can refi the loan... i even offer for them to call me and i'll tell them which credit union has the best rates.... you would not be mad at me for trying to make a little extra money at gm financials expense. If it was hidden from you... i can see why you would be salty about it. But if they told you 6 months, to me, that says they wanted to make sure you didn't have to pay 10,000 in interest.

scdaren · July 29, 2019

16 minutes ago, 13nick13 said:

you don't think we wish they didn't do that at all? don't you think we would like gm financial to have competitive rates? you don't think every dealer in the country wishes there were better incentives on the new body style silverado's? The reason this happens is because you want EVERYTHING. You want ALL THE REBATES, AND you want the car at invoice... the dealership HAS TO MAKE MONEY. I don't expect you to understand or believe me but you would be SHOCKED if you saw on average how much we make selling a car. I am not asking you for sympathy. what i'm telling you is that you don't have a good understanding about how car dealerships make money. Your opinions were formed in the before the last 10 years most likely and before the internet made pricing so much more transparent. I understand your concerns, but at this point you are really just being stubborn. If you knew me and came to my store, and had it explained right from jump street that you just have to take this dumb rate for 6 months and then you can refi the loan... i even offer for them to call me and i'll tell them which credit union has the best rates.... you would not be mad at me for trying to make a little extra money at gm financials expense. If it was hidden from you... i can see why you would be salty about it. But if they told you 6 months, to me, that says they wanted to make sure you didn't have to pay 10,000 in interest.

I just bought the Silverado and a new Chrysler this year, and get a new truck every couple of years. My impression for awhile now is that you guys actually lose money on vehicles if you don't do your job by selling the financing, warranties, etc. The Chrysler dealership I went to pretty much told me this. True? Isn't your job to recover the discount that was so transparently advertised online to get people in the door?

And sure, you, the sales manager, are stuck in this crazy system. I'm sorry. But you need to recognize, the entire system is just CRAZY! Go look at the thread on what people paid for their trucks. Like $15k below sticker is not unusual. The whole system is set up as like a game where the price you pay for a vehicle is completely dependent upon your skill as a buyer, and the actual price on the sticker that's on the car is completely meaningless. I can't think of any other consumer-facing industry that is allowed to operate this way.

As some famous guy once said -- don't hate the player, hate the game.

Edited July 29, 2019 by scdaren

Ebrown1120 · July 29, 2019

I just used gm financial for the discount it gave me on truck and made one payment and then paid it off.

Bob2C · July 29, 2019

It’s just a hassle buying a car. I only go into dealership to test drive. Then if I find something I like I negotiate with many dealers. I’ll travel anywhere to get the truck. I keep them 10 years so I don’t have to deal with the hassle.

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13nick13 · July 29, 2019

37 minutes ago, Ebrown1120 said:

I just used gm financial for the discount it gave me on truck and made one payment and then paid it off.

Thats your choice but the dealership you bought it from was charged $1500 from gm financial because you did that. I just hope it wasnt a small family owned store. They are the ones hurt the most by all of this. big dealerships can afford it.

Ebrown1120 · July 29, 2019

It was big a dealership, that’s way I don’t feel bad at all.

KARNUT · July 29, 2019

WOW, the games. I always buy end of the year. Only use dealer finance if it’s 0 percent with the end of the year discounts. Otherwise I use my bank. I can’t believe what I’m reading.

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scdaren · July 29, 2019

5 minutes ago, 13nick13 said:

Thats your choice but the dealership you bought it from was charged $1500 from gm financial because you did that. I just hope it wasnt a small family owned store. They are the ones hurt the most by all of this. big dealerships can afford it.

Lol, I am so not going to feel bad for a dealership because I bought a truck from them based on the contractual terms they offered me. We're all big boys here. Especially knowing how much they sold my trade for.

And I run a small family business. And I would never pull the kind of sneaky pricing and financing shenanigans on my customers that the car sales industry does on the regular.

13nick13 · July 29, 2019

50 minutes ago, scdaren said:

I just bought the Silverado and a new Chrysler this year, and get a new truck every couple of years. My impression for awhile now is that you guys actually lose money on vehicles if you don't do your job by selling the financing, warranties, etc. The Chrysler dealership I went to pretty much told me this. True? Isn't your job to recover the discount that was so transparently advertised online to get people in the door?

And sure, you, the sales manager, are stuck in this crazy system. I'm sorry. But you need to recognize, the entire system is just CRAZY! Go look at the thread on what people paid for their trucks. Like $15k below sticker is not unusual. The whole system is set up as like a game where the price you pay for a vehicle is completely dependent upon your skill as a buyer, and the actual price on the sticker that's on the car is completely meaningless. I can't think of any other consumer-facing industry that is allowed to operate this way.

As some famous guy once said -- don't hate the player, hate the game.

They weren't lying. The way dealerships make money is to sell A LOT of cars. You may notice a lot of small dealerships being purchased by big dealer groups. Its because the small dealerships can't lose money to gain your business. What happens is that you get a quote from a small store and they do everything they can, they strip the deal all the way to where they are breaking even... then you take that quote to a big dealer, they are willing to lose 500 because they are going to sell 300 cars this month and chevy will give them a big kick back for doing that. That's how we do it in america though. We demand lower prices, then get mad when amazon owns everyone. These small family owned stores are a real treasure. The places where the owner is there every day. Those stores cant afford to lose money because you want to put their price up against a giant dealer group with deep pockets. Just don't be surprised when all your favorite car people are gone and its all giant dealer groups who don't care about a bad google review. I promise you right now that if you put in a bad google review at my store, THE WHOLE WORLD STOPS until that problem is solved. These places aren't going to be around because people never think about the intangibles. Maybe the small dealer is closer and they can pick up your car for service. Maybe your kid goes to school with someones dad there. Whatever the reason, i pay more to buy local. To take this one step further and really confuse you though... if a dealer hits a certain number of deals through gm financial, then they will give you "certs" that you can use to discount cars for other customers. so if you don't get your gm financial deals, you wont have that extra money to help other customers get better deals.