Just want to make sure I’m not missing something obvious here…
Manufacturer is offering a $2,000 cash rebate with financing on a new car. I’m leaning towards buying with cash given the high-ish interest rate attached to the financing. Any reason NOT to finance, get the $2k cash rebate, and then potentially decide to pay off the loan in full later on?
EDIT: Assuming additional loan/doc fees are less than the cash rebate - which I’m sure they are at $2k rebate
Check with the dealer/financing institute you are going with. They can say opposing things but if I remember right, some of the brokers here were saying that the bank can claw back from the dealer if you do not finance with the bank for X amount of months.
As @art11 said, the finance company may claw back the incentive from the dealer (and the finance person you worked with may lose his/her commission) if you repay within X months.
If you ask about the specific duration, they’ll tell you since it’s their money at stake.
I did this very thing on a BMW CPO purchase, and since I had a completely positive experience at the dealer (and the finance person was thorough, affable, and not pushy at all), I made payments for 3 months to prevent this outcome.
To contain your interest expense (since you aren’t running a charity either) you can make large additional principal payments (instead of just the scheduled amount) while the loan is open.
You just want to make sure that you leave a sufficient balance so the scheduled amounts don’t end up retiring the loan early.
Here’s the Rube Goldberg device I built to effect the desired outcomes, posted for amusement since I’m the only person on Earth who would do it this way.