Toyota Financing - Pay whole balance first month?

I'm thinking of financing my truck for the sake of simplicity at the dealership, then sending a cashier's check for the full amount to Toyota. Do you guys think this would cause any unforseen issues such as penalties?

 

There won't be any penalties for early payoff. Why not just pay straight up at the dealership? Last time I did that it was a simple phone call to the bank to authorize the large charge via my debit card and a swipe through the dealership's machine.

 

Read your contract as it should state if there will be any early payoff fees.

 

I personally have heard of no prepayment penalties from any conventional financing. I financed my Tacoma through Wells Fargo while waiting for some funds and paid it off on the second payment with no issues. However, it should be easy to contact your lender and confirm that there is no penalty. Again, I sincerely doubt it.

 

Could be some incentives like 500 off with financing through Toyota. I’m not sure of local promotions but maybe?

 

I bought a Jeep for my daughter and the dealer offered an additional discount to finance through Chrysler. I financed it and payed it off at the first payment. Actually saved me money doing that.

 

Don't take the dealer GAP coverage if you do...

Protip: it is insurance sold by the dealer and the payments are calculated over the life of the loan, so if you pay it off early they owe you a refund of unpaid amounts but they will not contact you to let you know. Caveat Emptor.

 

Dealerships took personal checks for my 4Runner and my truck, why bother financing if you have the cash?

 

Glad you said something, i got a check from jeep three years after trading it in! $435 that I never spent well most likely.

 

Depends entirely on the contract that you sign. The only time I've pulled what you are trying to do is when I wanted to take advantage of TFC rebates. Unless you are getting a rebate just pay up front for the truck. You also don't have to send a cashier's check, a personal check was fine when I paid mine off.

 

Same here. When I paid my Jeep off at the first payment, I just sent a personal check. Not like they won’t be able to let it clear before releasing the loan.

 

Just one more chance of a title to be screwed up as it will have to have the lien holder removed .

 

Just pay. As simple as financing.

 

Isn't their potential credit score penalties? Idk shit about money but I thought if u paid stuff early it could "hurt" your score. Or is that an old Urban's legend?

 

I purchased my truck in May and let the dealer do the financing with Southeast Toyota Finance (they are the captive lender here in FL) because they could get me a decent sized additional discount off MSRP by doing the finance deal through them. My thought was to just refinance through my credit union fairly quickly, although the SETF rate wasn't far off from my credit union. SETF has no prepayment penalty except if you pay off in the first 6 months. Then they charge you a $75 fee to supposedly compensate them from setting up the loan, processing the lien, etc. I may wait the 6 months since the rates are pretty close anyway.

 

We did this and there was no issue at all. Purchased the truck in January as soon as we got notification of the the loan information called and paid it off. Still paid a very small amount in interest since that starts day one. No early pay off fee though.

 

I just did this and didn't notice any downside to it.

 

The only real hit to your credit score is the 4-5 points you will lose for the hard inquiry from the lender, plus whatever you lose by having the increased balance and changing the age and mix of your accounts. The inquiry hit is temporary and you get those 4-5 points back fairly quickly in most cases. Paying it off early in and of itself does not hurt your score at all. Just the effects to age and mix of accounts and balances stated, and that really depends on your particular situation.

 

Speaking of credit scores. I get my monthly free from my credit cards. The FICO score has never matched between them. Makes this whole FICO thing seem like a joke.

 

Depending on the loan rate and amount you might be better off investing the money and just paying off the loan monthly.

I'm in the process of getting a new DD for the wife and myself. It's most likely going to be a Corolla Hatchback. We've got the cash to buy it upfront. However, TFC is doing a 1.9% rate. So, I'll put $10k down and finance the other $15k. Over a 60 month loan that's $825 in interest that I will pay. I'll make at least 8% returns on that $15K over the same 5 years for a return of $7K. Minus the $825 I paid in interst that's a net of $6175.

The math is hard to argue with so I'll carry that loan and pay it off monthly. lol