My lightning came in Friday evening and I couldn’t make it in due to work. I was able to make it in on Saturday but of course my credit union was closed and they did not work directly with that dealer.
Due to my eagerness and lack of preparation (even though I’ve been waiting for this vehicle for a year…) I ended up taking a 5.5% Bank of America loan through the dealer.
Now I’ve called my credit union and they’re happy to refinance for 2.19% (48-84 months at Parsons Credit Union in Pasadena) HOWEVER:
The finance manager suggested a few things that I don’t know if it’s true and I’d love the forums feedback on:
You atleast have to make the first payment with this loan. (I know I have to wait for the paperwork but wasn’t sure if I had to wait for the first payment or not)
If I refinance to early (90 days from purchasing was the suggestion) They could charge a 1% fee.
Does anyone have any experience refinancing from a BofA loan? Especially before or right after the first payment?
Dealer marked up the finance rate to make some $$ on the back side of the deal. If you hold for 90 days they can keep the profit on it. If you refinance before that they will not get the $$. The fee charged would be from the dealership (unlikely they would really pursue it). The main question is if you want to keep a good relationship with them or not. It is unlikely you will still be able to get the rate quoted next week after the rate hike from the fed.
Well in reviewing this it feels like they 100% marked up the loan. We have excellent credit (both my wife and I have over 800 and own a home). it’s a 72month loan.
I should’ve just waited to pick up the car later this week (due to work wouldn’t be able to go back until Friday) and just done it through my credit union this week but I was eager to get it.
Based on this information it feels like I should just go for the refinance asap. Apply this week to lock in the current rate for 30 days and send over the paperwork as soon as possible.
I appreciate the dealer for not charging me over MSRP but didn’t love the finance experience.
Also pretty easy to join through becoming an ACC member, they’ll do everything for you so it’s not a multi-step process. https://www.parsonsfcu.org/who-can-join
Whether it’s a lease or purchase loan, on a vehicle, a great score means your eligible for the best rate a certain lender offers. Your not entitled to it though, it’s completely within reason for a dealer to mark up the rate for extra profit on their end. It happens all the time.
Yes! I called and made sure but also it’s listed on their site.
The lady was very patient with me since I rephrased the question 5 times to make sure it would work in my situation lol.
Totally fair if they want to mark it up. I understood that when taking the higher rate. The question really is just “what will happen if i refinance as soon as I receive the documents?”
If you can’t find any penalties in either the loan docs or the dealer docs then In theory you should be good. I wouldn’t count on having a good relationship w/ the dealer but that’s your call.
We’re all internet strangers here…take it with a grain of salt. Ideally next time you plan to show up w/ a credit union check or plan for a day off to have this stuff lined up in advance.
For future reference … If the dealer is not a direct participant with your CU on CUDL. Then you can request the dealer to provide an “option contract” agreement. It serves as a fallback funding for the dealer with their lender of choice if your CU doesn’t provide a check within 7 days of purchase.
