Refinancing Question

[Jeff Persson]

My apologies if this is the wrong place, but this seemed the most appropriate section to post this.

We are looking at refinancing our Telluride through our credit union as we can drop our rate by 1.5%. We had purchased the extended warranty through the dealership along with gap insurance and in this process found out we way overpaid for them. My question is, am I better off canceling the extended warranty first, letting that get processed and applied to my Kia loan and then refinancing or should I go ahead and refinance first then go in and cancel the extended warranty with proof of payoff on the loan and get a check back.

If I refinance first and then go in to cancel it after it’s refinanced my big fear is the dealership is going to try and say I missed some kind of deadline for cancelling it. I asked them about it and someone told me there wasn’t a time limit on it (though gap insurance is prorated when canceled after 30days from purchase), but now I feel less confident in the dealer and fear them trying some shenanigans to keep the add on sale.

 

[Tim-in-CA]

I would try to clean up everything with the dealer first so they don't try to pull as you said any "shenanigans" before refinancing. Dealers usually get a finance kick back but can take a few months to get back to them. In So Cal, gap insurance is available via automobile insurance policies. I think I'm paying $7/6mo for gap insurance on the Telluride and $10/6mo gap for a Tesla Model S with Costco Ameriprise.

 

[Jeff Persson]

I would try to clean up everything with the dealer first so they don't try to pull as you said any "shenanigans" before refinancing. Dealers usually get a finance kick back but can take a few months to get back to them. In So Cal, gap insurance is available via automobile insurance policies. I think I'm paying $7/6mo for gap insurance on the Telluride and $10/6mo gap for a Tesla Model S with Costco Ameriprise.

Unfortunately our auto insurance would only allow us to add it within 30 days of purchase. We are four days past the window.

 

[Jeff Persson]

Unfortunately our auto insurance would only allow us to add it within 30 days of purchase. We are four days past the window.

So I went down to the dealership today and submitted the cancellation for the extended warranty. The finance guy called me later to tell me that I would likely want to make sure I paid the first three payments before refinancing or Kia might come back to me and try to re-coop the $1500 incentive. Nothing in the loan paperwork mentions anything about having to make three payments or lose the incentive and there is no mention of it in the contract’s pre-payment section. Is this just the dealership trying to get me to wait on the refinance to make sure they get their incentive money on the backend?

 

[Tim-in-CA]

Ask him to point this out in the contract where they can do this. If he can’t, do what is best to you. Kia would have to take you to court to get the money ... not a good PR move for them.

 

[ucinn]

If you pay it off before the first three payments, then the dealer will not get the 1500 from Kia..He wants you to not pay it off so the dealer gets it. They won't come and try and get it from you. Just trying to scare you into keeping it 3 payments so they get their money.