Should you get dealer financing and then pay off the loan in full?
"Can I get a car loan then pay it off immediately? I have the cash to pay for a new car. However, I've heard you can negotiate the price of the car, especially if you use dealer financing."
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Answered on Jul 28, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“Dealerships sometimes use financing to turn a bit more profit through payments on interest. As such, you might be able to negotiate a deal where the price is less, but your interest rate is higher. If you can broker this deal for a new car, take it.
Then, pay off the loan after the first month. (Waiting a month ensures that there are no “errors” with paperwork, real or fake.)
Just make sure that there’s no prepayment penalty. If there isn’t, you’re essentially getting the car for far less and you won’t have to pay the added interest.”
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