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refinancing my Prius - College Graduate Rebate?

Discussion in 'Gen 2 Prius Main Forum' started by Prius_Gnome, Aug 3, 2008.

  1. Prius_Gnome

    Prius_Gnome Junior Member

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    I have a question about refinancing my Prius loan and, first off, I can't believe no one ever had a question about it? No similar topics were found.

    Anyway, I received my loan from Toyota Motor Finance Corporation last August 2007 for a new 2007 Prius. The $400 rebate was applied directly to my bill of sale so that my loan amount was reduced. I've already made 11 monthly payments out of 63 (+3 for Extended Warranty which I already cancelled).

    So I was in my local credit union yesterday and I saw that they still had low auto rates so I applied and they approved a used car loan at a great low rate of 4.99% for 60 months. Yes, I realize I would be stuck with paying my car loans for about one more year but that shouldn't be a big deal.

    My question:
    1. When I bought my Prius, the dealer said that I would only get the $400 Recent College Graduate rebate if I financed my loan through TMFC. Do you know if I'll have to give that $400 back if I refinance my loan with another loan company? The website Toyota Financial Services: Home doesn't mention anything about having to finance through TMFC but there might be fine print and I hoped someone here on PC would know more about it.
    2. Does anyone else who refinanced their loans have any helpful pointers?

    Thanks.
     
    #1 Prius_Gnome, Aug 3, 2008
  2. galaxee

    galaxee mostly benevolent

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    1. i refi'd after getting the rebate and didn't have to pay it back.
    2. consider the total amount paid over the life of the loan. the longer the loan, the more interest you pay. if you can pay off early without penalties, you don't have to take the whole 60 months to pay it off and it's not an issue. we paid off our car loan early with no penalties. saved us $$$.

    oh and consider fees to refinance. i think we paid $100 which was well worth it in the long run. in short, run the numbers.
     
    #2 galaxee, Aug 3, 2008
  3. SW03ES

    SW03ES Senior Member

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    Whats the interest rate on the Toyota loan you already have.

    Yeah I agree with Galaxee, I would get a calculator out and figure out what payment you need to make to get it paid off in the same amount of time you would have if you had the original loan and enjoy the interest savings.

    and you wont have to pay the $400 back...Toyota won't even know you refinanced the car. Would you have had to pay it back if you decided to write a check and pay the loan off at this point? No, and its the same thing for Toyota when you refinance.
     
    #3 SW03ES, Aug 3, 2008
  4. Prius_Gnome

    Prius_Gnome Junior Member

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    Thanks for the replies. Since that $400 rebate is permanent, I guess I'll go ahead with the lower interest rate.

    I currently have 6.30% on the Toyota loan so it's not like I'll be saving thousands of dollars but a few hundred dollars seems worthwhile.

    I specifically asked the credit union if there were "any early payment fees or any other fees/penalties" and the representative said no. So I'm going to assume there won't be any fee to refinance the loan and no fee/penalty if I decide to pay off the loan early or make extra payments.
     
    #4 Prius_Gnome, Aug 4, 2008
  5. SW03ES

    SW03ES Senior Member

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    Lower interest is a no brainer, do it.
     
    #5 SW03ES, Aug 4, 2008
  6. timwalsh300

    timwalsh300 Member

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    FYI: When I purchased my Prius this April (2008) the APR for college grads was down to 4.9%

    You can't pay it back faster? I financed about $12,000 of my purchase through Toyota to get the $400 college grad rebate, but I've already paid back about $7,000 of that. Will your credit union let you accelerate payments like that to save interest?

    Tim
     
    #6 timwalsh300, Aug 4, 2008
  7. Prius_Gnome

    Prius_Gnome Junior Member

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    Yeah, I can pay it back faster. I asked the representative if it would be possible to get an even lower rate if I lowered the payment period and she said no but that I would pay less interest if I decided to go with a shorter loan duration.

    On a similar note, you already paid back $7,000 of your April 2008 loan? WOW:eek:. Without even breaking out my financial calculator, it seems your monthly payments are almost $2,000. Did they make you sign a 1-year loan to get a low 4.9% rate?
     
    #7 Prius_Gnome, Aug 4, 2008
  8. galaxee

    galaxee mostly benevolent

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    when things were good for us, we paid as much as possible on our car loan. we paid off our car in less than 3 years of ownership, including 6 months no payments in the beginning, racking up interest during that period, and a refinance loan.

    the earlier you pay like crazy on the loan, the more you save in interest. i'm glad we paid all we could afford when we did, because we would have had to sell the car this spring if it wasn't paid for.
     
    #8 galaxee, Aug 4, 2008
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