I really wish I brought this up before getting the car, but oh well; The dealership was offering a $3000 rebate on my car. $1000 of the rebate on the car was a requirement that I sign the loan under MAC (superb APR if you like giving money away!). The salesperson tells me however, that the normal thing people do is refinance with their bank of choice to get a better APR after the required 3 months with MAC... Have the rest of you done similar things?

I already had a pre-approved loan (6.49% APR) for a new car going into the dealership expecting to simply sign the check for the right amount and hand it over. Unfortunately (?), I did things their way, and just let the check rot (it expires next week). Come 3 months, I will have to reapply for the loan from my bank (USAA). I am not sure how the ramifications work here considering the car either new or used (Do I now have to apply as a used car loan? Which offers the lower APR?). Assuming I get the same APR in Feb., my calculations show I will still have saved over $500 overall. I'm pretty sure I requested in writing the stipulation that I had to keep the loan with MAC for 3 payments, but I went searching through my paperwork, and I couldn't find it. Can anyone shed some light on this? Thanks in advance!

 

I did the same thing to get the rebate and even talked to the sales manager about the refi but nothing was said about a three month minimum. Somewhere else on this forum people stated that they just paid it off with the first payment.

I had also already researched the better rates from AAA, USAA & my credit union. It is my understanding that at least from AAA and the credit union a car is "new" if its just been registered and is less than 4-years old (I guess to take care of the "old" RX-8's still out there .)

 

I can only speak for my local CU, but on thier rate sheet a "new" car is defined as any car model year 2005 or later (this was in October when I was looking for financing). Therefor you do not have to pay the used car rate on a refinance. It should be like this at most banks/CUs, just make sure you check with them.

 

The so-called "required" 3 months with MAC is bogus, it doesn't exist. My salesperson tried to tell me that as well but it's not in the MAC credit contract. If you read it closely, it says that there are no penalties associated with paying it off early at any point (unless they've changed it since I bought mine in January '06). So I got pre-approved for auto refinancing at my local credit union and as soon as I purchased the car under MAC, I went into the credit union a week or so later and refinanced. Saved me about 4% in APR.

They want you to pay the 3 months because then by that time a lot of the rebate is made back in interest. I hear that the dealerships get some sort of kickback for convincing customers not to refinance as long as possible. So cash that check and pay off the car, you've been had my friend!

 

I took the same MAC financing $1k rebate and paid the whole amount of the loan when the first payment was due. No issue. This was in Massachusettts...don't know if the lending laws are different in other states, though. Since the Mazda credit is out of Atlanta, don't think there'd be any difference.

That's my experience.

 

Cool, was thinking about just doing that in the first place, I'm in MA too. So, I think I will do just that.

=)

 

I finally found the credit app, and you're right; there is no penalty for paying off early. I went back to USAA and refinanced right away. I am saving over $50 a month now going from 9.25% to 6.49%.

 

Good boy