Kia financing - Kia Niro Forum
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post #1 of 8 (permalink) Old 10-02-2018, 06:49 PM Thread Starter
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Kia financing

If you finance through Kia you get 1000.00 cash back.
Their interest rate is 3 points higher than I can get at my credit union.
They told me I could finance through Kia and make 5 payments and than refinance to a lower rate. I confirmed this with my credit union.
I asked the dealership why I had to wait until the 5th payment and was told Kia would want the 1000.00 back if you didn’t make 5 payments. That sounds like a prepayment penalty which the contract says there isn’t.
My thought is that the dealership gets a kickback for getting me to finance through Kia and I need to make the 5 payments so they get their kickback.
Thoughts? Opinions?
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post #2 of 8 (permalink) Old 10-02-2018, 08:41 PM
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When I was looking for my Niro EX HEV with Advanced Tech Package, I went through TrueCar and received some “TrueCar” quotes back from the participating dealers. I sent those dealers and a few others my lower offer and only one dealer came back with a counter offer that was close to mine. I accepted the offer and went to the dealer to complete the sale. I had already lined up a pre-approved loan with by a Credit Union at 3.49%. Boy, interest rates sure have jumped up!

When I got there, I even had them knock the price down a couple hundred dollars more. Then it went to the dreaded “Financing” which took forever. I suspect that they make you wait so that you are exhausted and vulnerable by the time you get to Finance.

Finally, we went in and he tells us he lined up a loan with Bank of America for 2% more than my Credit Union. Naturally, we protested (plus my wife did not want to deal with BoA due to their shady business practices) and the guy tells us that we have to finance through them to get all the discounts they added to get to the final price. I told him that no one told me this at any point during our negotiations. My CU was on their list of banks, but they had us waiting so long, the CU was closed for the day. So finance guy left and the MANAGER came in to play the bad cop. He said he was losing money because they still had to pay TrueCar and we had to go with the BoA loan. Plus we could go with the original loan and then wait one week... no, two weeks...no, maybe a month and then refinance it with the CU. I’m glad we didn’t do that and find that we had to make 5 payments. We held our ground and gave the impression we were ready to walk. At this point, I was willing to walk away.

So Manager leaves and the BDC(?) who emailed the offer in the first place comes in and told me that he got the loan with my CU with the rate that I was expecting. What an ordeal!

Last edited by Nouseformonkeys; 10-02-2018 at 08:45 PM.
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post #3 of 8 (permalink) Old 10-02-2018, 09:17 PM Thread Starter
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Originally Posted by Nouseformonkeys View Post
When I was looking for my Niro EX HEV with Advanced Tech Package, I went through TrueCar and received some “TrueCar” quotes back from the participating dealers. I sent those dealers and a few others my lower offer and only one dealer came back with a counter offer that was close to mine. I accepted the offer and went to the dealer to complete the sale. I had already lined up a pre-approved loan with by a Credit Union at 3.49%. Boy, interest rates sure have jumped up!

When I got there, I even had them knock the price down a couple hundred dollars more. Then it went to the dreaded “Financing” which took forever. I suspect that they make you wait so that you are exhausted and vulnerable by the time you get to Finance.

Finally, we went in and he tells us he lined up a loan with Bank of America for 2% more than my Credit Union. Naturally, we protested (plus my wife did not want to deal with BoA due to their shady business practices) and the guy tells us that we have to finance through them to get all the discounts they added to get to the final price. I told him that no one told me this at any point during our negotiations. My CU was on their list of banks, but they had us waiting so long, the CU was closed for the day. So finance guy left and the MANAGER came in to play the bad cop. He said he was losing money because they still had to pay TrueCar and we had to go with the BoA loan. Plus we could go with the original loan and then wait one week... no, two weeks...no, maybe a month and then refinance it with the CU. I’m glad we didn’t do that and find that we had to make 5 payments. We held our ground and gave the impression we were ready to walk. At this point, I was willing to walk away.

So Manager leaves and the BDC(?) who emailed the offer in the first place comes in and told me that he got the loan with my CU with the rate that I was expecting. What an ordeal!
And they wonder why nobody likes or trusts dealerships.
Just think of all the little ole ladies that pay MSRP
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post #4 of 8 (permalink) Old 10-02-2018, 09:42 PM
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And they wonder why nobody likes or trusts dealerships.
Just think of all the little ole ladies that pay MSRP
Exactly! They didnít count on us having our own financing lined up. They expected us to roll over and just go ďOkay, I guess we have no choice.Ē

Iíve never had this issue before. I usually tell the dealers up front I have my own financing lined up and that if they can beat the rate then Iíll get the loan through them. I did tell the Kia sales guy this when he was bringing the paperwork to the finance guy. When I bought my last car, the CU rate was 1.89% and the dealer found a loan for 0.9%. I guess the days of low interest loans are gone for now.
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post #5 of 8 (permalink) Old 10-02-2018, 11:12 PM
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Yes the dealer gets a cut. The finance company (regardless of what the finance company is) pays the dealer what amounts to a sales commission for the loan. I have a buddy that's worked in the auto finance business for years both on the dealer side and the finance company side. He also told me this scenario reverses for subprime such as those 'you got a job, you got a car' dealers. The dealer has to pay the finance company as much as $3000 depending on the scenario because the repossession rates can be as high as 50% over the life of the loan so the car company is buying down some of that risk for the financing company. And that is just one of many reasons why those dealers have prices that are so out of whack.
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post #6 of 8 (permalink) Old 10-03-2018, 06:09 PM
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There is no prepayment penalty. I financed part of my purchase in mid August and received $750 credit towards the purchase price. Early September, Kia Finance sent me a loan payment voucher to submit with my payment. On the back of the voucher was a toll free number to call to get a quote on the payoff amount valid for a future expiration date. I sent a check and received back a letter stating the loan had been paid in full. A week after that, I received a check for $3.22 for the excess interest I had paid, apparently, my account was credited before the expiration date. Estimated loan period was around 40 days, not 5 weeks.
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post #7 of 8 (permalink) Old 10-05-2018, 09:57 PM
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My dealer told me the requirement was two months, so I immediately sent a check to Kia for the full financed amount, less $100 which I paid off the following month.
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post #8 of 8 (permalink) Old 10-07-2018, 10:44 PM
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I bought a couple weeks ago and financed with Kia to get the $1,000 discount at 2.9%. Likewise was told I need to hold it for 6 months.


However, you can pay it off or refinance the minute you get home from the dealer. There is nothing contractually that says you can't. It's more a matter of courtesy to the dealer if you want, as they do benefit if you keep it the specified time. When I bought a Forte last year at 5%, I refinanced the same week. I did so because the rate was 3% higher than my CU, as well as the fact I detested the dealer I bought it from (I would have refinanced even if my CU's rate was the same).

With my Niro, I'm planning on waiting the full 6 months, as the rate isn't too bad given the current market. And I actually had a good experience with the dealer I used this time.

2018 Niro LX PHEV
2019 Pacifica PHEV
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