A bit of background:
This past Friday I was able to finally take delivery of my C8 Corvette (picture posted in the Trophy Garage thread). I signed an 84-month loan for the vehicle via the dealer with GM Financial at 9.64% (shockingly high, I know) with full intention to refinance the vehicle via IFCU or some other CU after the 120-day kickback period (this was dealer-stated). IFCU rates have gone up significantly (though I have a 30-day preapproval lock at 3.5% through IFCU) to the point that it wouldn’t make sense to refinance with them in 120 days. I also have a Z06 on order with this dealer so I don’t want to sour or lose the relationship with them. I was thinking of letting my salesperson know about the situation and offering to pay the kickback myself but refinancing with IFCU at the locked rate (I’d save more money than I’d be giving up). I also understand that I can try to refinance with another CU - I’ll be exploring this route as well. Finally, the dealer cut me a check of ~$700 because their software wouldn’t allow them to change the tax rate from their county to my county; I’m thinking of offering to not cash the check to refinance the loan more quickly (but before I do that, I need answers to the question below).
Looking for answers to the following questions:
How long is the kickback period for GM Financial?
How much of a kickback does the dealer get from GM Financial (~101K loan)?
Talk to the person in finance. Let them know the situation and that you don’t want to burn them if they have any sense they will talk to you. Also, do it during a weekday and not end of the month.
Just curious…why did you finance with them in the first place? You ordered the car in advance, correct? Did they require you to finance on an ordered car?
I financed about 100k and it would come out to be 40k in finance charges over 7 years if I continue with this loan (which I have no intention of doing)
Your $700 refund check wouldn’t cover the interest of 1 month (est north of $800).
Maybe I’m the outlier here but if the dealer is willing to screw you on a 10% interest rate, I wouldn’t put all my eggs in the Z06 promise basket.
Call finance tomorrow and see what they have to say. Don’t give them the options, let them tell you what they advise. If they don’t want to play ball then close out the loan with a new lender with the next phone call - you owe them nothing.
Dealers get a kickback from the financing organization for referring customers to that financing organization; the customer (in this case me) needs to keep the loan for a certain period of time for that kickback to be paid, usually 60-90 days. In this case, the dealer told me the kickback period is 120 days. If I didn’t care about the relationship with the dealer, I would just refinance and the dealer would get screwed out of that kickback. However, because I’d like to do repeat business with this dealer, I’m trying to work something out.
If their lenders actual buyrate was 9.6% then the dealer would get a flat from the bank with no chargeback period.
the only reason why they asked you not to refi within 120 days is because thats when their chargeback period ends.
So in actuality their buyrate was closer to 8% and they just marked it up and made a few thousand. if you were at 100k amount financed, that’s about $5000 to $5900 to the dealer depending on the lender / dealer split participation guidelines .
Just a quick update for everyone - I spoke with the finance manager and he told me he understood the situation and that I would be ok refinancing earlier than the 120-day chargeback period (told me he’d do the same thing if he had a 3.5% 96-month rate lock ). Promised me the relationship would not be compromised and that I should still be on the Z06 list. IFCU has fully approved me and should be sending me the paperwork tomorrow morning; once the paperwork is signed, they send an overnight check to GM Financial and I am officially refinanced. Thank you to everyone for your input, it was extremely helpful.
P.S. The finance manager was out on vacation when I was purchasing the vehicle, so the salesperson was acting as the finance person (obviously had a lot of incentive to get me to stay with the 120-day chargeback period). I also told the finance manager that I purchased an extended bumper-to-bumper warranty with them, so they should be making money on that as well.
) months.
). Promised me the relationship would not be compromised and that I should still be on the Z06 list. IFCU has fully approved me and should be sending me the paperwork tomorrow morning; once the paperwork is signed, they send an overnight check to GM Financial and I am officially refinanced. Thank you to everyone for your input, it was extremely helpful.