It is illegal for creditors to penalize you for paying off a loan early. As soon as you get the first statement, I would refinance it.

I got my truck for invoice minus the rebates. So about $3000 under invoice. The rebates come from Ford not out of the dealer's pocket. The dealer still made $1200 in hold back plus other incentives from Ford that we'll never know about. Go to another dealer.

 

This worked for me back when I bought my truck new in 2002. I negotiated based on what I wanted my monthly payment to be. Ford lowered the over all price of the truck considerably to accomplish this, but my interest rate was 12% (hey, I was 22 years old). I assume Ford looked at it as they would get their money back from me in interest. I knew even then that was a very high interest rate, but I knew my company's credit union could do better. So I purchased the truck and refinanced the next day. Went from 12% to 4% . Like others have said, it's just business.

I'm looking to pic up a new XLT Screw with 4x4 and the 5.4 around this time next year. I need to brush up on my negotiating skills, it's been a while.

 

I hate the negotiating games, so my advice is to get an X-Plan pin at the website below or anywhere else you can get one. Then you need no negotiation skills! In addition to getting you to within about $150 of invoice, you also get all rebates and the dealer fee is reduced to $75. All with no argument or discussion - the price is the price is the price - nothing to negotiate! (except your trade, if you are doing that...)

There is no penalty for paying off the loan early - the finance guy will tell you that you need to make 3 payments before paying it off but this is untrue - you can pay it off as soon as you get your first payment request, possibly earlier - no penalty! I have that in writing from Ford Credit.

Educate yourself, ask very nicely at the X-plan site, and save yourself the negotiation hassle! Good Luck!

http://www.blueovalforums.com/forums...p?showforum=45

 

My experiance was the same as Redfisher. Paid off after 1 month. No penalties. Should have paid off after 1 day!

 

I got the "D" plan and opt'd for the financing because i got $1k off the truck, the dealership did the math and making the payments on the truck (for the required 6 months) still made me save $200). I made the payments and payed off the truck after 6 months, which was what they told me I had to do or I would pay a penalty fee...

 

i was shocked when they got my payment reduced by $200. i even got a 3 year oil change package for $200 and an extended warranty with it and still had my payment dropped. most of it was my interest rate dropping about 4% too.

 

I have used Ford Credit for the past 10 years. My current truck is financed for 60 months at 0%. That's free money, as far as I am concerned. I have never had a problem with them.

 

It's 90 days. Finance at least $7000 through Ford Credit, make three payments, then pay it off. That will give you the $1000 bonus credit cash.

 

^^ exactly right freeky... that comes out to only about 2 payments anyways. once you re-fi with another bank/CU, FMCC can't come in and start jacking with you. the loan has been satisfied as far as they're concerned. on your credit report, it will show a loan with FMCC for X amount of dollars and a zero balance with a note to the side stating something to the effect of "balance transferred", the length of the original note, how many payments you made, etc etc. you'll then see another account on your report with your bank/CU listed and the current amount owed to them, length of note, monthly payment, etc etc. it doesn't really harm your credit all that much, most lenders see that and realize that you just refi'd with another lender.

have your dealer weigh taking FMCC cash and Ford's available rate to YOU versus NO FMCC cash and financing at your own bank under their terms. Then make the decision what's best for YOU. What's good for some ppl may not be good for others. Everyone's situation is different b/c no two financial positions are the same (credit score, money down, income/debt ratio, etc)...

Hope this helps.

 

I paid cash.

 

There is NO penalty for paying off early and no minimum number of payments - read the post again. NONE, ZERO, ZILCH, ZIPPO!

The finance person will tell you otherwise but this is NOT true! I heard somewhere that the dealer does not get their cut if the loan is paid off early, so they will tell you anything necessary to get 3 payments needed to secure their cut. Mine told me I could pay $20 k on the first payment to minimize the interest portion of the next 2 "required" payments, but he would not take a large down payment or run some other number scenarios for me. Then he pizzed me off more with some political talk. So I did my research and discovered there is no penalty for early payoff and paid it all with the first payment. Should have done it a week after the deal but I waited and they got a little bit of interest from me.

NO PENALTY, NO MINIMUM NUMBER OF PAYMENTS!!! Go for it!

 

To hopefully shead some light on the situation. A few things i have herd discussed here firs and foremost there are no penelty for early pay off thru FMC. Second the rebates and incentives on the vehicle, if you read the fine print, are paid to the dealer. that being said if the dealer sells you the truck at msrp less rebates only thats considered a full pop. futhermore invoice is not their "all in price" hold back is included in the invoice. and 1200 sounded like a low number for hold back on a 40k+ vehicle.

Futhermore, the dealer/ finance office usually dosent benifit from special rate financing, its usually a flat pay vs. an actual percentage, more often than not they will shop your score aginst other banks at a lower rate to allow them to hold a point or 2 so you will.

If it were me, if i had no trade. i would find my new truck, invoice less rebates, ford credit , 20 days(to make sure all the paperwork goes thru etc.) then refiwith additional cash towards principal.

If you decide to stick with ford credit, make your first payment a double, on a simple intrest loan this offsets the rate allowing more of each payment to go to principal, saving you money in interest and payments in the long run. hope this helped.

 

0% financing is not free money, it's an incentive.

If you don't take it, you can ALWAYS negotiate a better deal with cash or financing through the bank or CU of your choice.

But I would NEVER finance a new vehicle. If you can't afford to pay cash, buy used. Even then, I would recommend finding a vehicle you can afford to pay cash for. Financing should only be used for assets that appreciate.

 

Making the first payment a double is a step in the right direction but it is only a small step. Saving up and paying cash is the real solution.

 

There is nothing wrong with financing as long as you can pay the note. It may not be your cup of tea but without financing alot of people would not have the nice things they have, and due to the lack of consumers, there would be a lack of demand, which in turn would lead to a lack of innovation.