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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."
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“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.”
View full answer
- Gregory R.
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