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Is there a disadvantage to paying off a car loan on the first month to get promotional incentives?
I noticed that if I finance a new car through the dealer, I stand to earn about $2,000 in incentives and rebates. I have the cash to pay for the car. Are there any downsides to getting this financing for the incentives and then paying off the balance after a month?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“Unless the loan has
prepayment penalties
, you shouldn’t have any problem paying off the car loan
immediately. However, if you pay off the loan after a month, don’t expect the dealership to do you any favors afterward. They may see your move as total deception. Because of this, it may be worth having a repair shop or another dealer for your maintenance moving forward.
Keep in mind, after you pay off the loan, you’ll also have to get a lien release and possibly retitle the car.
You’ll also want to reevaluate your insurance. Lenders require full coverage. Once you pay off the loan, you can change your coverage, though with a newer vehicle it’s a good idea to keep higher coverage.
If you want to explore your insurance options after you pay off your loan, try using the free
Jerry
app. Jerry compares quotes from the top 50 providers and delivers the best deals to your phone in minutes.”View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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