rjdoc74

I don't know if this is an appropriate forum for this question, but I just purchased an Q5 and a CA talked me into getting a minimal loan with Audi FS (~$12,000) to qualify for $1500 credit on a purchase. The finance person told me I can pay it off in 6 months. Now, when I log into my Audi FS account I am given an option to pay off now. Does anyone know of any downsides of paying the loan off so quickly? (I know, I know, I should just call them, but I thought I'd ask you guys first).

TIA!

DanMontgomery

I paid my wife's Audi off in about 11 months. Didn't have any extra fees for paying it off early. I ended up calling asking the same question. The lady was very nice and took my payment on the phone.

Ended up paying a little less the $300.00 in interest (at least the account summary says).

Hoping to have mine paid off within the next year.

V/r
Dan

rjdoc74

Thanks for your reply! I am wondering is sales person BS'd me that I need to keep the loan for at least 6 months. Given she BS'd me on a bunch of other things. I will give them a call within the next few days.

amstrad

The difference is between a simple interest loan, where you only pay interest on the remaining principle and an add-on interest loan, where the total interest is calculated up front, and you are responsible for all principle and pre-calculated interest, regardless of whether you pay off early. The later usually also has prepayment "fees" or penalties.

When I got my AudiFS loan, I made certain that it was the former. I qualified for a 6 year loan at the lowest interest rate, and I'm paying it off in 24 months. That way my required payments are low (should I have any temporary problems in income), but I actually make triple payments and end up paying very little in interest over the life of the loan.

rjdoc74

I don't think AudiFS offer different type of loans. I checked my account and there is definitely no precalculated interest showing anywhere; it shows like $30 in interest currently. The point is, I was ready to write a check for the whole balance, but wanted to get additional $1500 rebate from AudiFS. Now I want to pay this sucker off ASAP.

motoguy128

Pretty rare to have early pay-off penalties unless it's secured in an unusual way on the banks side of things. I'm even thinking the Dodd Act made early pay-off penalties for most consumer loans illegal.... but don't quote me on it.

DennisMitchell

I refinanced my AFS loan after about 6 months. Very routine. You can get the pay off letter online and you / your bank send in the check. You will receive a loan satisfaction letter and don't forget to go the DMV and have the lien removed from your title.

rjdoc74

Thanks everyone. I spoke to Audi FS today and loan can be paid off anytime without penalties. The delaer BS'd again about needing to wait 6 months. Will be paying it off by the end of the week.

snagitseven

Obviously the finance guy had an incentive tor get customers to finance so he lied. Very sleazy. I'd report that to the dealership owner and AOA. This is the kind of thing that gets auto dealers a bad reputation.
Frankly, I've found the finance guys at dealerships to be the least trustworthy of them all.

DennisMitchell

And you don't need to involve the dealer (finance guy) in any of it. I agree, the finance guy in the dealership is not always your friend, but he is there to get the transaction correct at delivery.