Dealer Financed (Forced to use)

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I'm speaking with a dealer who is selling at MSRP for an ordered car, but said I would have to use their financing. I am not sure of the specifics of the deal such as rate etc as this would not be known until the car comes in (estimated 4 to 5 months), but is this just talk or has anyone ever seen a contract that forces the buyer to use the dealers financing? If I declined their financing at the time of pickup and brought my own, would they have to accept? I have never heard of this tactic before, just want to know what the laws are etc. They are also asking for a non-refundable deposit to order, is this common too? This is in PA btw. Thanks

 

[Promethus78]

That is a time honored tradition with dealers. My dealer said the same thing, I showed up with my own financing and they didn't say a thing. Money is money, although they get a little incentive if they can get you to use KIA Finance. I have also used the dealer's financing before to get the rebate and then refinance with my bank on the first payment.

 

[HillCountry]

I’ve seen both refundable and non-refundable deposits. This thread can give you some idea on both: What did you pay for your KIA Telluride?

 

[rick_sam]

I'm speaking with a dealer who is selling at MSRP for an ordered car, but said I would have to use their financing. I am not sure of the specifics of the deal such as rate etc as this would not be known until the car comes in (estimated 4 to 5 months), but is this just talk or has anyone ever seen a contract that forces the buyer to use the dealers financing? If I declined their financing at the time of pickup and brought my own, would they have to accept? I have never heard of this tactic before, just want to know what the laws are etc. They are also asking for a non-refundable deposit to order, is this common too? This is in PA btw. Thanks

It seems we are talking to the same dealer

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[rockadile]

Worst case, take their financing and refinance at a local credit union or elsewhere the next day.

 

[MisterUtah]

Worst case, take their financing and refinance at a local credit union or elsewhere the next day.

In the past, when I’ve seen dealers do this, you have to keep that loan for at least 6 months. Then you can refinance.

Typically when I have seen a dealer do this, they incentivize it by giving you 1% off MSRP (or invoice). It’s funny and interesting to see this happen just to get MSRP.

 

[Familyman20]

In the past, when I’ve seen dealers do this, you have to keep that loan for at least 6 months. Then you can refinance.

Typically when I have seen a dealer do this, they incentivize it by giving you 1% off MSRP (or invoice). It’s funny and interesting to see this happen just to get MSRP.

To clarify a couple things here, you can not refinance until KMF (or any lender) generates and then provides you with your account number. Without it your new bank can not pay off the first loan for the refinance, it's impossible.
Also, your dealer may tell you that you can not refinance for 'X' months. This is false. They get a retention bonus on the new loan which is why they tell you this. You can refinance as soon as the account is generated. For me it was within a week that I was able to refinance with the new bank.
Search car buying tips online and you'll be amazed at how many different ways the dealer can screw you in one transaction, I mean profit off you. They're not going hungry that's for sure. GL

 

[rockadile]

I wonder if you could call a few days later to see if there is an account number instead of waiting to receive the paperwork.

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[Familyman20]

I wonder if you could call a few days later to see if there is an account number instead of waiting to receive the paperwork.

That's what we did yes. Whomever your dealer finances thru would probably need to fax a payoff letter to your new desired lender as well. I definitely wasn't waiting to get an account summary via snail mail.

 

[chocotaco]

I have yet to get to the financing portion of my purchase (car is still on order), however when I spoke with one dealer, the rates offered by Kia were highly competitive. They were lower than my local credit unions so I was shocked.