Rules using VW financing - do i need wait 3 month payoff?

[edog]

Just bought a 2019 VW e-Golf in SF Bay Area. To get the best price, $23k, I had to use VW financing. They told me I had to wait three months before I could pay it off so that all the paperwork could go through. This doesn't sound right? I got the price already and I paid for it, are there any reasons why I would have to wait 3 months? It's no big deal to wait a while but I just didn't get the logic.

 

[manybees]

I doubt that you are required to wait 3 months, though you should read your loan papers thoroughly to make sure. Many states have laws against early payment penalties on auto loans.

That said, most dealerships need to have the loan run at least 3 months before the automaker financing corporation will pay them their incentive payments for getting you to finance through them. Your paperwork has already gone through — you got your car and you’re making payments. They’re now waiting for you NOT to pay it off early so that their “paperwork” can go through, meaning so that they can get their cut of the deal.

So, essentially, if you pay it early the dealership gets screwed. Depending on how you feel about your dealership, that may be a good thing or a bad thing.

 

[coupedncal1]

I doubt that you are required to wait 3 months, though you should read your loan papers thoroughly to make sure. Many states have laws against early payment penalties on auto loans.

That said, most dealerships need to have the loan run at least 3 months before the automaker financing corporation will pay them their incentive payments for getting you to finance through them. Your paperwork has already gone through — you got your car and you’re making payments. They’re now waiting for you NOT to pay it off early so that their “paperwork” can go through, meaning so that they can get their cut of the deal.

So, essentially, if you pay it early the dealership gets screwed. Depending on how you feel about your dealership, that may be a good thing or a bad thing.

I am in the exact same shoes. I bought my car in June and they gave me a great deal with this understanding I will keep the loan for at least three months. I would like to be fair to the dealers as I knew that going into the purchase I will need to pay interest for three months at their inflated rate (5.99%). They have to make a living too and though I am no fan of the dealers in general, in this case, it seems worthwhile to not screw them over. Just my two cents.

 

[zanzabar]

+1

They told me four months. But I think I'll make the third payment and then work on transferring the loan to my credit union.

 

[g0rwell]

When I bought a Mazda a few years ago, they requested I wait 3 months. I paid it off immediately.

I just bought the 2019 Golf, and their finance guy didn't even ask for me to wait a certain number of months, said I could pay it off right away.

 

[Rsolaregolf]

When we leased our NOS 2015 Passat TDI in 2017 we paid it off in a month and bought it outright. The deal was $5K off msrp if you bought, $8.5K if you leased. Even with the extra lease fees we came out over $2K ahead. When we traded our 15 eGolf for a new Volt in March (wife couldn't deal with range anxiety) we had to finance through GM but it was a super deal. We paid it off in a month no problem.

 

[sactogolf]

There is no requirement that you wait three months. Your dealer asked you to wait three months because they do not receive their VW incentive payment ($5K) until the loan has been outstanding for three months. They likely would not have sold you the car at the price agreed unless they believed they were likely to receive the $5K incentive, so in my case paying the marginal additional interest for three months is a fair trade for the discount received. Although I have no explicit obligation, I do not plan to replace my loan until after month 3. You may feel differently about your dealer interaction and act accordingly. However, if enough people stiff the dealers on this, they would be less likely to pass the discount on to us customers.

 

[JoulesThief]

Do you have any idea how much VW stiffed me on Sales tax on 3 VW TDI's that I had to return, and replace with newer cars, here in CA, where in my county sales tax is 9.5% ?

I'd do the loan, and pay off almost everything shortly after the paperwork is signed, except $500 for the remaining 3 months, to get the ridiculous interest rate down that they are charging on that loan. for only $500. That's a stupid amount of interest on a new car loan, with VW dealerships getting greedy again.

 

[eGolfJoe]

I need to call VW Financing on Monday as I was wondering why I didn't get a second bill only to find out they aren't going to send me another bill until Feb 2023.

Amt financed is $20.8K and after making the first payment of $17K they're saying my principle is now $16.9K

 

[TwoCarsAWeek]

I also bought in June. The finance manager asked me to keep the loan for at least 3 months, otherwise they don't get paid the incentives that allow us to buy the car at $10k less. So, I plan to keep it for 3 months.