wishboneracing

Hi
Soon to buy a new 06.
If you do some financing thru MAC in order to get the extra $1000 current rebate, and pay it off early, exactly how is the interest treated? Do you still pay what the full interest would have been if you paid it off normally?

Thanks.!

wishboneracing

never mind, its a simple interest loan, no funny stuff.

thx

kalix

hey wishbone, did the same thing, I took advantage of their MAC loan with the rebate. no you don't pay the full interest. Also keep in mind that there is NO early payoff penalty. Incase the dealership tells you something like, you can't pay it off within the first 3 months, as they did with me. I found out when I refinanced on the second month. So, if you plan on refinancing, do it early. Good luck with your purchase.

map

I was told it can't be paid off before 3 months today too. What's in it for the dealer when we wait 3 months? There has to be some reason they want that even though it's not really necessary (it's not in writing anywhere right?).

tbomb887

The dealer tell you this so they dont lose on the finance side of things. I used to work for Mazda and I would do the same thing.....especially with a cash buyer to convert to finance. But what I would say is that as a courtesy to the dealer, please dont pay off for 90 days. The small amount of interest paid on the first 3 payments is negligible.....especially if a cash buyer was going to pull $$ out of an investment. He would be losing money otherwise.

If you like your dealer (which most of our customers did) let them get there $$ at hardly any cost to you. If they are jerks....screw 'em. But remember these finance guys have a job just like you and me.....you wouldn't like some one to take $$ from you.

I know I will probably get flamed for this....especially being my first post, but there's the answer to the question.

map

Just clarify one thing. The money you are talking about that the dealer gets, is that just the 3 months of interest, or is there an additional payoff to the dealer once the loan hits 90 days?

jisoo26

The interest piles up quick. I refinanced about 4 or 5 weeks after I bought and ended up paying over $300 in interest already. That's 1/3rd of the $1000 rebate I had bought the car with. Refinance as soon as you drive that thing off the lot otherwise you lose the entire rebate in that whole 90 days scam.

tbomb887

Its hardly a scam. As far as the what amount the dealer gets out of it...its usually a flat payout. And no, its not the $1000. Usually around $200+very small % of the rate given. This is the case at every dealership for every manufacturer, if you finance through the dealer. Regardless which bank they use. This is just extra incentive for you to use mazda's bank. They make they're money back, or close to it. There rates are somewhat competitive....especially for middle of the road credit. My brother bought a 6 from me awhile back and used the MAC rebate. Refinanced about a year later. Wife works at a credit union so his rate was about 4 points lower.

As far as $300 in interest in 3 months....that could be the case with 0 down and a 10% or higher rate. This usually isnt the case for most RX8 buyers.

Nergal

I did the MAC financing in Nov 06 and paid it off in 2-3 wks without any problems. They honored the rebate & only paid a few bucks on their high interest (2-3 wks worth). No problems seen.
Awesome car so far!
Nergal

rglbegl

Simply put. NO. You pay no interest.
BUT . . . You must make 3 payments to get the MAC cash. ( cash back/$1000 off )
There is no prepayment penalty as long as you give them 3 months payments, then you can pay it off in full. So you only have to pay interest for 3 months.
Simple interest loans make for happy customers

map

Now I'm confused. Wasn't it just established that the only thing contingent on 3 months of payments is a bank to dealer payoff? The $1000 is good no matter when it's paid off.

dwynne

The first thing wrong with your post is "The small amount of interest paid on the first 3 payments is negligible" - wrong. On a simple interest loan the first payments have a LOT of interest in them. The percentage of interest goes down with each payment, but it is still a lot of money to leave on the table. For example, if you borrowed $25,000 at 7% for 60 months, your payments would be $496.06 per month. In the first payment, $145.83 would be interest, in the second it would be $143.80, in the third $141.75. So if you wait "90 days" from the day you buy the car and have made 2 payments you will be out $289.63 in interest just for being nice to the dealer? The more you borrow, the higher the rate, the longer the term the worse it gets. $30k at 8% for 72 months would be $397.83 in interest in just two payments.

So if the paperwork does not say you can't pay it off early, sign it, and pay it off as soon as you can or want to. If the dealer and/or MAC do not like it, then they should not offer you the loan and the rebate (or not charge such a rip off high rate).

Dennis

dwynne

Pay it off or re-finance when you want to, and don't worry about the 90 days (unless it is in YOUR contract). The DEALER gets stuck for money if you don't keep the loan open for 90 days, but it will have no effect on your deal. If MAC offers you a fair rate, the keep the loan, otherwise covert it to something better as soon as you can.

Dennis

jburns

Your figures work only if you are going to pay the loan off in full and not finance elsewhere. If you refinance then the amount of interest you will be "out" if you wait 90 days is only the difference between the rates of the two loans.

nycgps

iTrader: (1)

You can pay it off as soon as they hand you the keys.

Its just that dealership wont be able to get certain % of $$$

map

Well I just refinanced. Did it two weeks after purchase, as soon as i could basically. Hope MAC doesn't come after me!

I went through email and called MAC directly, through both channels they confirmed that I can pay off with no penalty and will not lose the rebate. There is nothing in my paperwork that says otherwise either. Dealer was insisting MAC would come after me if I didn't make 3, 4, or 5 payments (yes, 3 different people at the dealer gave me 3 different numbers). Screw them in the butt I say. They gave me a **** rate and lied to me. If they had been upfront and given me a reasonable rate in the first place I'd have stayed with them, but they gave me 10.4% even when I already knew I had good credit. On my refi I got the tier 1 rate and walked out with 5.69%.