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I'm ready to pay cash for my 2014 Soul. Dealer says there's a $1,000 rebate if I finance. What are the possible downsides of either financing and paying it off immediately or only financing a minimal amount (maybe with 90% down)? Does Kia have prepayment penalties or some tricky interest calculation that would negate the benefits?
 

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Not to my knowledge. Did that with a previous vehicle - there was no prepayment penalty.

Ask when you get to that point. They've got to tell you the truth on finance charges.
 

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I use Kia finance and they are fine. No penalties for early payments. No weird this or that. But I doubt they would want to only finance 10%. maybe you should finance 75% and then keep the account for a year and get the great reference from it on credit services? If you dont use credit ever then just negotiate a smaller price for cash and be happy.

Soul is a great car. I just wish I could drive mine more. (been ill) Bought mine in March and only just made 1000 miles total. The rebate is because the dealership makes a commission (points) on finances sold.
 

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Yeah, there's no penalty. I did the exact same thing. I used the Kia financing to get the rebate and then paid it off when I got the statement. The dealer said there was some kind of penalty to the dealer if I didn't keep it at least 4 months, but that's the dealer's problem, not mine.
 

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There is no prepayment penalty. I also took the $1000 finance rebate and financed the least possible amount ($6k) that the dealer will agree on to get the rebate. Dealer said that $6k is the minimum that Kia will agree to finance. I paid off the loan when my first payment was due even though the car salesman told me to wait for 3 months to pay off. No penalty.
 

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You will always get a better deal if you pay cash. If you're getting 0% financing, anyone in finance would tell you that you're an idiot to pay cash. It's a FREE LOAN! Use your liquid more wisely. My 2 cents
 

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used to own a 2016 Soul SX 2.0L - Caribbean Blue
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You will always get a better deal if you pay cash. If you're getting 0% financing, anyone in finance would tell you that you're an idiot to pay cash. It's a FREE LOAN! Use your liquid more wisely. My 2 cents
..........but if you pay cash (or arrange your own loan via your bank) you get a larger initial discount that if you finance it at O% through Kia, at least in Canada.
 

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..........but if you pay cash (or arrange your own loan via your bank) you get a larger initial discount that if you finance it at O% through Kia, at least in Canada.
As mentioned in my post, you get a better deal if you pay cash :) You're never going to get 0% from the bank. The couple thousand you save (10% or less) on the car by paying cash isn't worth giving up that much liquid when the dealer will give you 0% financing(aka free loan).

Adam
 

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As mentioned in my post, you get a better deal if you pay cash :) You're never going to get 0% from the bank. The couple thousand you save (10% or less) on the car by paying cash isn't worth giving up that much liquid when the dealer will give you 0% financing(aka free loan).

Adam
I made my best deal and then told them I would take the additional $1,000 off promotional if I used KMFC to finance $7,500. The interest after 4 months is just over $90 and I will now pay it off. So I saved another $910 by NOT paying cash up front. Of course Kia wishes I would stretch it out over 5 years, but not my thing. You gotta know the game to play the game.
 

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There is no prepayment penalty. I also took the $1000 finance rebate and financed the least possible amount ($6k) that the dealer will agree on to get the rebate. Dealer said that $6k is the minimum that Kia will agree to finance. I paid off the loan when my first payment was due even though the car salesman told me to wait for 3 months to pay off. No penalty.
When I bought my Soul at Kia of Cerritos (sucks) I easily qualified for Kia Financing at 2.9% plus $1,000 rebate. When I got the the finance manager, he drew the contract up for 5.9%! I told him that was not our agreement. He re-wrote the contract for 3.9% ...again not what we agreed on! He said the additional 1.0% is for "dealer participation"...whatever THAT is. That 1.0% goes straight in the stealership's pocket! Long story short, I paid off the loan before the first payment was due with a credit union loan of 1.95%. I think the dealer only gets his "dealer participation if the loan lasts longer than 3 months. I would love verification on this though!

But to answer your question, the problem was with the dealer, not Kia Motors Financing. No pre-payment penalty on my part. I just hope the dealer gets screwed out of the additional 1.0%. They screwed themselves.
 

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Devil is always in the details. If you want to know ask for the contract & take it home to read. That should drive the finance guy nuts.
 
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