Financing 2022 - Dealer ONLY will use Toyota Financial??

I went to Coggin Toyota yesterday in Jacksonville FL, I intended to finance a new 2022 Tundra through their finance manager with whatever bank provided the best rate (854 was my credit score on the newer scale). So I should have any option of banks available, right??

They will ONLY finance through South East Toyota Financial, meaning they won't accept a check I bring from a credit union or shop SETF to any bank. I can pay cash, no problem, but that's the only other option. So to get my Tundra, non-cash, I had to accept a SETF contract or no deal. They do have a working relationship with PenFed, which is offering 2.29% on 72mo, but I had 1 option SETF at 3.99% or I don't get the truck.

How is this allowed? I was looking for them to do the best they could to get me the best rates I qualified for based on my credit. Realtors can't tell you to use their favorite mortgage broker only, how can the dealership tell me I have1 a bank, but I can refi in 6mo if I want (SETF has a $1200 prepayment penalty too). Not to mention the additional interest being paid. I should be able to give them the amount from any source.

So to get my truck, I had to sign the SETF contract. They told me if I came with anything that wasn't a personal check, they won't accept it, because using SETF impacted their allocation for future cars and trucks for sale. I was also told that other dealers are charging $5k over so I shouldn't be upset either about the way they do financing.

Has anyone else had this happen? My sales guy afterward said they have been doing this for months, I am frankly not happy about this at all. It costs me more in interest now, I have to go through refinancing later, and the national rates may go up from what is offered now so I have a higher rate through the term.

 

Dealerships can refuse any type of financing for any reason. Might seem immoral or unethical; it's just business. That said, car dealers usually refuse outside financing if they've lowered the price enough. To make up for this discount, they want you to finance with them to recoup that money.

So I would have talked to my credit union, told them the situation to see what ideas they have. Banks and credit unions don't use checks (that's like 20th century stuff), they use electronic funds depositing.

The dealer doesn't like it cuz the funds are held a few days while the credit union verifies the legal transfer of the title.

 

Definitely wouldn’t give business to shady practices like that. People need to stick to their guns and stop supporting these nonsensical companies. Leave a nice google review so other buyers are aware of this and not suckered in

 

I was under the impression this was how all dealerships had always operated. They'll give you a cash price and your financing option(s). If you don't like the rate and term they're offering, go to your bank or credit union of choice, get a loan or line of credit, tell the dealer you're paying cash then repay the loan to the bank.

 

A lot of dealers do this, some will offer a lower price if you use dealer financing, kind of like stores that give you 10% off your sale if you sign up for a CC. In cases like yours, if you want the truck, take the dealer financing and turn right around and refinance with your own bank. I have done this several times. When I bought my last truck, the gave me a $2500 “discount” for going with The dealer financing. Next day, refinanced with my credit Union.

 

I got a lower price for financing through SETF, but was able to refinance after 90 days with no penalty. The rate was already pretty competitive, but I refi'ed through USAA anyway.

 

Pay cash and refinance with the bank of your choice within 30-90 days (depending on the bank) after purchase for the new car rate.

 

Yeah, seconding what Gonzo said - I negotiated a pretty great deal on my Tundra back when I purchased it prior to walking in and all was smooth sailing until I got to the finance department. Guy wouldn't budge on something stupid like a 5% APR (wife and I have excellent credit), but was willing to defer payments for first 90 days. On the ~80th day I refinanced through my insurance's loan company and got the rate I was originally looking for.

All-in-all, an annoying inconvenience & it made me sure I'd never return to that dealership again.

 

I did that in 2020 with my truck. Next day I went right on over to Navy Federal and refinanced. LOL

 

I have never liked southeast Toyota. - just me, don’t beat me up over it.

 

I am in the process of doing the same thing. when I got my truck I thought toyotathon was still going on but when I got to the finance office they showed me the papers that said 3.49%. tried arguing a bit but they wouldnt budge and I had to leave for work that day. in the process of refinancing to see what navy fed would give me. I would still leave and do business elsewhere for 0.5%.

btw- how do you find out if there's a penalty for refinancing from toyota?

 

I agree, you can shop around for a better loan and pay off what you’ve got now.

 

They wanted the incentives that Toyota gives them for financing through SETF. As soon as they said we won't accept your outside financing, I would have walked out the door and that sale is lost. We bought the wife's 4Runner in June of 2020 with outside financing in Clearwater and not a single issue. I had the keys and vehicle washed and out the door in less than an hour.

 

The issue I'm having is they won't accept another banks funds.

 

I'm not sure what that means. If I have a bundle of money that I want to trade for a truck, I don't see why it matters if it's cash I took out of my account or a certified cheque the bank issued for me. Sounds like some kind of a scam.

 

This is crazy I financed with my own bank. They gave me a better rate. they told me Toyota financial would match the rate but they couldn’t beat it. Then they told me in order for me to go through my own financing they would require an additional $500 dollar non refundable fee. I though that was ridiculous and gave them the negative. They waived the fee and accepted my banks financing.

 

Sorry to say but this is why dealers keep doing this. You didn’t have to sign, like you said, unless your truckless and really need one now. If more people would stand up to this abuse instead of going with the I want it now. Plenty of Toyota dealers in your area. I drove 2 hours to get my wife’s Lexus because no one want to deal or were doing a bait and switch. You could have save much more by doing your homework, especially with your credit score.

 

Sorry BANK funds, so it's finance with them, do personal check... They won't take a check from a credit union that is tied to financing outside of Toyota. Like it's invalid to them.

 

Update:

So now they are willing to finance me with a local bank after talking to the GM. Another person came up to me after talking to the sales manager, who overhead us, he had same thing happen last week, and also was frustrated with it.

Not sure the benefit is there to have customers who can't get the best rates and terms on a purchase like this. Wish they would steer towards Toyota, but if you find better not do what happened yesterday.

 

I'm pretty sure if you're offering legal tender (or some proxy for it), it's illegal for them to not accept it in exchange for the goods they're selling. I'm sure they're only trying this because they think they can get away with it in the current market but they still sound like the type of dirt bags I wouldn't want to do business with.

 

I will tell you what most people do not know. When you use the dealer to finance, the dealer sets the interest rate and payment, not the lender. Just thought I would toss that in.

 

I just got approved for 2.29% from my bank compared to toyota's 3.49% financing. don't buy into the financial bank lies! viva la resistance!

 

My dealer kept putting my financing off in lieu of Toyota Financial at a whole percent higher.. I got annoyed and just signed so that we could leave. Turned around and refinanced with USAA the very next day and just got the paid in full letter 3 days post delivery.

Figured they already got a little bit of a market adjustment, they don't need any other incentives from me financing with them since they weren't willing to knock more off

 

What I've seen on how it USUALLY works at a lot of dealerships, I would be 3rd generation car salesman or F&I at a dealership had I not gone a different direction than the rest of the family:

If you go to your bank, they may approve you at a certain rate, as an example, 3%. Then you go to the dealer and they pull your credit and send in an app with maybe 5+ places. They may have an agreement with certain financial institutions that they get a kickback for the loan, paid up front, in the percentage over what they give you. So maybe they can get you a loan at 2.5% and they tell you it came back at 3%. The bank will cut them a check for a certain amount of that .5% over they gave you the loan for, for sending them the business. I would suspect Toyota financial has certain kickbacks for the dealer.

On rare occasion, if you have a friend at the dealer that is higher up in administration you can get a loan "at cost" and one of them might come back lower than you can get elsewhere. I am lucky to have a brother in the Boat Business that was able to get my boat loan "at cost" and its actually lower than the rate I got on my house.

They do this for a few reasons, sometimes its to make up a loss on a trade to show you are getting more for a trade or to show the new car at a price lower than advertised, then they immediately get the kick back. Plus it lets them get a little haggle room, they go back and forth and maybe come back with a "hey, we were able to get your rate down to 2.9%" if they are chasing certain requested monthly payment numbers by the buyer.

 

Before making it to the dealership I watch YouTube videos of a former dealer (your advocate alliance) and his son, who helps people make better decisions during financing and he states many of those things dealers do that you just said. i.e. kickbacks. And also, how they pretty much break even or go into positive by passing their lost onto the buyers they got to pay overages. And from parts, accessories and crap like auto butler of course

 

Yes, accessories, warranties, paint and interior protections packages are a huge money maker. an example would be a tonneau cover being sold at $1700 vs you may be able to buy the same one for $1400. they buy them in bulk and paid less than MSRP. Warranties usually have substantial markup. It's tough when you think you have everything worked out then you sit down with the F&I guy to do paperwork and suddenly its another 2 grand because they insist you need certain things. Push back.

 

Happened to me at Autonation Winter Park, I told him I had financing and was putting 15 K down and they never mentioned I could only go through Toyota until I arrive to pick up the truck. Finance man said I could refinance anytime I wanted so I did two weeks later for 1.99% at my credit union

 

Toyota of Clermont in FL tried to pull the same BS !! However they offered my friend 0% for 36 (which they didn't think he was going to be able to do) but he played their game and took it. If he feels like refinancing with Langley Credit Union at 1.99% for 60 he will move the loan to them. The moral of the story is not to let Toyota Finance manipulate you. "STAND YOUR GROUND" People !!!

 

the problem with this is since he is in SET South East Toyota (this also applies to GST Gulf States Toyota) they are not bound by the same rules as Toyota USA. since they existed prior to Toyota USA they can set their own rules for finance and options/packages. if you call Toyota USA they will redirect you to SET Finance or GST Finance which is owned by the same owner who runs SET or GST.

also to add, warranty work for SET/GST is wonky especially if you buy from outside SET/GST and have work done inside SET/GST regions or vice versa.

i am glad i am not in either of those regions.

also toyota.ca is really wonky for toyota.usa taken into canada and vice versa.


SET finance : www.setf.com

wiki on GST : https://en.wikipedia.org/wiki/Gulf_States_Toyota_Distributors

SET : https://jmfamily.com/our-businesses/southeast-toyota-distributors/

 

This, it's really not a big deal.