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Financing & Prepayment Penalty

Discussion in 'Prime Main Forum (2017-2022)' started by muirex, Mar 19, 2021.

  1. muirex

    muirex New Member

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    sorry if this isn’t the correct forum. I just bought a Prius Prime for an amazing price, but from a pretty shady dealership. We financed to get the additional $1k manufacturer rebate, but were told we needed to hold the loan for four months before we could pay it off.

    However, there’s nothing in the contract that states the four month restriction. California doesn’t have any prepayment penalties and our contract says that we may “prepay all or part of the unpaid Amount Financed at any time”. I thought it was a little weird that nothing in our contract says that, but the finance manager at the dealership was adamant that we were locked in for four months minimum. Are we in the clear to pay everything off the first month? They were very shady (also refused to give us the $900 CA clean fuel reward) so I’m not sure how much I can trust them at their word.
     
    #1 muirex, Mar 19, 2021
  2. triggerhappy007

    triggerhappy007 Active Member

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    As long as your contract says no prepayment penalty, you can pay it off right away. The dealer is telling you to hold the loan for 4 months so they will get a kickback. I've been pretty lucky with good dealers so I hold the loan for 3 months. If it was shady like your dealer, I would pay it off right away.
     
    #2 triggerhappy007, Mar 20, 2021
    jerrymildred likes this.
  3. muirex

    muirex New Member

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    Thanks for the advice! We’re bringing the car in to get detailed tomorrow (they didn’t detail it when we first bought it since they dragged out the sale for hours), so hopefully they still take good care of it. I’m a bit worried that they’ll take it out on the car because I was irritated at them, but c’est la vie
     
    #3 muirex, Mar 20, 2021
  4. jerrymildred

    jerrymildred Senior Member

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    Actually, if it was a shady dealer, I would not have given them my money.
     
    #4 jerrymildred, Mar 20, 2021
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  5. Kenny94945

    Kenny94945 Active Member

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    Um.
    Besides shady-ness, perhaps the 4 month comment was for all the paperwork to become "setup" with the agencies.
    I would pay off when I received the first billing statement from the finance co (and call them to confirm the payoff amount or expect a second statement with $10 imputed interest on it).

    FWIW I have heard that waiting 6 months before paying off a loan can increase one's credit score.
    Yet, that may be an urban legend and more payment history than 6 months needed.

    Enjoy your new car :)
     
    #5 Kenny94945, Mar 20, 2021
    muirex likes this.
  6. Db17

    Db17 Member

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    Was the dealer a registered Clean Fuel Dealer? If not they can’t give you that rebate. In my case the dealer gave me $1k instead of the $900. I’m pretty sure they have to kick in part of that rebate money.
     
    #6 Db17, Mar 20, 2021
  7. prime2020

    prime2020 Junior Member

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    If you financed with toyota financial, there is no prepayment penalty. I paid off my loan in 2/3 weeks after purchase when the dealer advised I needed to hold it for 3 months min. I called TFS to verify and then paid it off online.

    Posted via the PriusChat mobile app.
     
    #7 prime2020, Mar 20, 2021
  8. muirex

    muirex New Member

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    It was a dumb mistake, I definitely wouldn’t do it again.

    They were indeed registered, just refused to give it to me when I brought it up :(
     
    #8 muirex, Mar 20, 2021
    Last edited by a moderator: Mar 20, 2021
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  9. PiPLosAngeles

    PiPLosAngeles Senior Member

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    Depends for me. When I can buy a new Prius for $8,000 off MSRP before tax rebate I'll go to a shady dealer (y)
     
    #9 PiPLosAngeles, Mar 20, 2021
    muirex, jerrymildred and pghyndman like this.
  10. jerrymildred

    jerrymildred Senior Member

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    I think we're all prone to cranial flatulence when we're all jazzed up about a shiny new car. :D
     
    #10 jerrymildred, Mar 21, 2021
    Last edited: Mar 21, 2021
    Pulse07 and muirex like this.
  11. ETC(SS)

    ETC(SS) The OTHER One Percenter.....

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    They're ALL shady.

    I'd pay the car off WHEN you want to.
    Holding the loan for 4 months at whatever interest rate you're paying would still less expensive than forgoing the $1000, but it doesn't matter.
    They already sold you the car.....;)
    If you pay the car off it will be YOUR car!
    What are they going to do.....send you a BILL for the additional $1000?

    The $900 CA reward is probably a state thing.
    I'd do some clicking around in sites ending with dot.ca.gov to find out about that.

    If these slimeballs shanked you for an extended warranty or some tinsel-plated pre-paid service plan....GET A REFUND IMMEDIATELY.

    Good Luck with the car!
     
    #11 ETC(SS), Mar 21, 2021
    muirex likes this.
  12. muirex

    muirex New Member

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    Thank you! I almost bought into the extended warranty because it was my first time buying, but my parents talked me out of it. It would’ve been $2,600 additional on top of the stated price :confused:
     
    #12 muirex, Mar 22, 2021
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  13. PiPLosAngeles

    PiPLosAngeles Senior Member

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    I've owned 6 Toyotas over the last couple of decades. Other than annoyances like rattles and squeaks, and things that are normal wear and tear, here's a list of all the required repairs I've needed over those decades:
    • Headlight bulb burned out in the 2012 PiP after 130,000 miles
    Yes, that's it.
     
    #13 PiPLosAngeles, Mar 22, 2021
  14. PT Guy

    PT Guy Senior Member

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    If in doubt about any conditions in your finance contract, contact the lender, not the dealer. When you pay, you pay the lender directly, not through the dealer, so the dealer doesn't need to know anything.

    Good call skipping the so-called extended warranty. These are not a warranty, they are a prepaid repair contract. They are a money loser for almost every one.
     
    #14 PT Guy, Mar 22, 2021
  15. Teddy2021

    Teddy2021 Junior Member

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    Hi Muirex,
    When and where in Socal did you get you LXE from? We're shopping for one this weekend and are unable to even get close to your OTD. Lowest I got was $26,598.41, and that is without accessories or alloy wheels. Thanks
     
    #15 Teddy2021, Mar 25, 2021
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