Pre-Payment Penalty Mis-Information

[DVDA]

Ok i asked a while back (on e90) if there were any pre-payment penalties for paying off BMW Finance contract early.

Irv (a CA) told me it was 6 months before you can pay without penalty. My CA told me 3 months.

So I decided to ask for a copy of a BMW Finance contract and in the contract it says there is NO prepayment penalty. So I am wondering what gives? Why do I keep getting conflicting answers?

It has been a while since my first year law school contracts so I cant remember squat but is there a different contract my CA may spring on me to sign along with this finance contract when I take delievery of my vehicle?

P.S. Sorry about the size of picture, I cant figure out how to make it smaller and have it still be legible.

[Alow]

I can't imagine what the CA would have that would supersede this contract. I'd go with what the contract says. Just make sure there are no other clauses anywhere in the contract.

Furthermore, I don't think I'd take the CA's word for any financing issues. I'd call BMW Financial Services directly.

[DVDA]

I read the contract all the way through it says nothing about 3 months, 6 months etc, I am just wondering if there is another contract he will spring on me when I go to pick up the car.

[FJUNO78]

you mention law school in about 40% of your posts.

[DVDA]

Originally Posted by FJUNO78

you mention law school in about 40% of your posts.

A search of ALL my posts reveals I said Law School 10 times...out of 1,186 posts that doesnt make 40%

/math fail

Maybe 40% of the posts you read of mine or you saw the long conversation i had with fwb about his Law School in a thread in General Forum

[FJUNO78]

Originally Posted by DVDA

A search of ALL my posts reveals I said Law School 10 times...out of 1,186 posts that doesnt make 40%

/math fail


Maybe 40% of the posts you read of mine or you saw the long conversation i had with fwb about his Law School in a thread in General Forum

good idea, I quick search of your username + law came up with alot more...

here are a few quotes.


"My CA didnt try the "There is a Florida Regulation" excuse cause he knows I am a lawyer and I will look it up lol"


"I will just put the right amount, cause if I get caught the Florida Bar will rip my nuts off"

"Torts tickles my fancy, I tried to take any class that involved any type of Tort...

"Products Liability, Medical Malpractice, Workers Compensation (Reverse Torts), Civil Pre-Trial Practice, Defamation & Privacy etc"

"Tire Tax? Thats bs...Document Fee? How much was this....If they charge $200 to prepare documents I will tell them to drop the fee and Ill prepare my own documents. I am a contract lawyer"

"There is a road that no one goes down, its a short cut to my house on the way home from law school...."

I really don't care either way, I'm just messing with you! :-)

[DVDA]

ok So Law School returns 10, Lawyer returns 3 and Law returns 18 (although i didnt directly refer to Law School, or being a lawyer, I just said things such as "it is against the law" or "check the law" but ill give you them as part of the count)

Lastly, 2 of my quotes you provided are from that long conversation i had with Fwb that I mentioned and others were from over a year ago

Regardless 18 + 10 + 13 = 41....41 is not 40% of 1,186 total posts

What does it matter to you anyway? Why dont you try to be helpful instead of distracting?

[FJUNO78]

Originally Posted by DVDA

ok So Law School returns 10, Lawyer returns 3 and Law returns 18 (although i didnt directly refer to Law School, or being a lawyer, I just said things such as "it is against the law" or "check the law" but ill give you them as part of the count)

Lastly, 2 of my quotes you provided are from that long conversation i had with Fwb that I mentioned and others were from over a year ago

Regardless 18 + 10 + 13 = 41....41 is not 40% of 1,186 total posts

What does it matter to you anyway? Why dont you try to be helpful instead of distracting?

fair enough, I am in rare form today.

carry on

[DVDA]

Originally Posted by FJUNO78

fair enough, I am in rare form today.

carry on

That is a first...I have a new found respect for you....usually internet disagreement/arguments/fights/quarrels (whatever we just did was called) go on forever but you dropped it real quick

I like you now

[FJUNO78]

Originally Posted by DVDA

That is a first...I have a new found respect for you....usually internet disagreement/arguments/fights/quarrels (whatever we just did was called) go on forever but you dropped it real quick

I like you now

[Yvette]

I would stick to the contract...
its all BS what they throwing out of their mouth

[Angry3]

These days auto loans, like all consumer finance products, are heavily regulated. You're not going to see pre-payment penalties on car loans from reputable or semi-reputable companies. The reason the CA is telling you "90 days" or something longer is that they're told to by the finance department. If the loan is paid off in full (through the buyer paying cash or refinancing at a lower rate) then the loan commissions are "charged back" to the F&I reps. So if you prepay within 90 days whatever the F&I guy cleared on your deal commissions wise ends up being forfeited.

Of course the dealers don't want customers to know that, you have people that buy a car on impulse and get their loan "packed" with an extra point or 2 of interest (more if the state doesn't regulate the markup). The loan docs don't prohibit any pre-payment, but the dealer tells them there is to discourage it so they get to keep their commissions from the lender.

Hope that sorts everything out.

[pdq62]

I took delivery of a 128i two weeks back. When I got to the finance person, she told me I had to make at least 6 payments on the loan to keep the $1500 rebate for financing with BMWFS. I looked at the finance contract and there was nothing in writing to this effect. I asked her to explain and she said it was written down somewhere -- she leafed through some internal documentation but could never find the exact verbage from BMWFS with this "rule". She said this was some type of BMWFS policy and she was trying to warn all customers that were getting the rebate of that policy. I kept proding her for a written statement but she could not find it.

I'm not sure how BMWFS would attempt to recover the financing rebate if you paid off the loan early -- the whole thing seemed a bit "shady" to me.

[singular]

I bought mine in March '09 when there was the two free payments incentive. Even though I had planned to pay cash, this sounded like a really sweet deal.

I asked multiple times about prepayment penalties and was assured in writing that there were none. I scanned the docs very carefully and found only mention of a small documentation fee (about $50 as I recall) if the loan was paid off within a month or so.

I'll be doing a full payoff later this month, so I'll be able to confirm no penalty.

[luv135i]

I would like to know this aswell...Anyone just pick up the phone and call bmw financial or send one of those "priority email" to a financial cust serv rep. I would do it but im technically not a customer yet.

[pdq62]

I logged into the account services section of the BMW site (US) to see if I could find any documentation on an early payoff triggering the loss of the current financing rebate. I couldn't find anything. For grins, I followed the link that allow you to request an early payoff quote for a loan. It gave me the expected amount, without adding on any penalities. There were no warnings or other language about a loss of the rebate if the loan is being paid in full.

My guess is that Angry3 is right: the dealer may lose dollars or points with BMWFS if a loan is paid off quickly. The dealer's financing staff may be trying to steer customers away from this thought process.

Hope it helps...

[KingOfJericho]

Originally Posted by FJUNO78

you mention law school in about 40% of your posts.

If you want to see something REALLY funny, look up the post history of "The Infamous..." Pushing 4,000 posts and every single one just says "" or "M-Sport FTMFW!!!!!!" or some slight variation. It's hilarious!

[DVDA]

Originally Posted by KingOfJericho

If you want to see something REALLY funny, look up the post history of "The Infamous..." Pushing 4,000 posts and every single one just says "" or "M-Sport FTMFW!!!!!!" or some slight variation. It's hilarious!

I like coldasicex5 how he says "Damn!" all the time and is know as "That Damn Guy"

He has 75K posts

[Skully]

If you don't finance for at least 6 months the any rebates get charged back to the dealer from BMW FS.

So... You can pay cash and not get the rebate or finance for 6 months and get it. You'll pay interest over the 6 month period but still come out ahead.

[luv135i]

Thats what we have been hearing but really everyone wants to see something that we signed stating that fact. If we pay it off early and the dealership gets charged the credit back, we never signed anything saying we had to finance for a minimum of 6 months to keep the credit or I am aware I will be charged the credit if I terminate my contract with Bmw financial. If someone was to hit me and total the vehicle within the 6 months insurance will pay off the car and my contract with BMW would end before the 6 months. I guess someone would have to eat the $1500 credit i guess This is why something needs to be in writing regarding the circumstances surrounding the holiday credit.

[dbtheo]

As a general rule, there is no pre-payment penalty.

On occasion they make expceptions for certain promotions, like when they are making 2 payments or something like that.