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Old 02-07-2012, 09:17 AM   #1
amdhunter
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Default Financing Question: Received Lien release letter, what now?

Just got a lien release letter from Toyota, somehow I expected the letter to look more official. Do I just take the old title, and this letter to the DMV?
Man it feels freaking GREAT to know I own my car.

Old OP ---
I am tired of car payments, so I decided to pay off my car. Right now, I made a payment that will leave me with exactly $1000 left to pay. I stopped short because Toyota Financial wants a check to be mailed to them for the payoff amount. I've found no documentation saying that I couldn't just pay the whole thing off online.

I'll give them a call Friday, when the actual payment should be processed, but I am hoping you guys might know something. I've paid off a lease early (with AT Garage help), and bought cars cash but I've never paid off a car. This will be the first car I've actually owned since 2004.

I have 36 months left on the agreement on an original loan of ~$20k @ 5.9%. Current balance is $3200.

My questions are:

What happens if I pay off the $1000 left over online instead of mailing them a check? Will I cause myself a problem?

Will I get the title to the car right away, or do I have to pay extra for that?

Is there any break on insurance at all from moving to ownership from financing?

I want to call Toyota to find out what the heck, but I really don't want to do it from my work desk or until it says $1000 left.

Last edited by amdhunter; 02-25-2012 at 06:22 PM.
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Old 02-07-2012, 09:22 AM   #2
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They may have some early payoff penalty (did you look when you took the loan?).
Most online loan repayment systems have a "payoff amount" that they will quote you which is good for a few weeks.
They should not charge you for the title. Once you pay off the loan, it will show up in the mail a few weeks later.

Your insurance won't be interrupted, but once you have the title, make sure to go to your agency and change the beneficiary on your insurance so that they don't pay the loan company in the event of loss.
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Old 02-07-2012, 09:25 AM   #3
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Quote:
Originally Posted by Ferzerp View Post
They may have some early payoff penalty (did you look when you took the loan?).
Most online loan repayment systems have a "payoff amount" that they will quote you which is good for a few weeks.

Your insurance won't be interrupted, but once you have the title, make sure to go to your agency and change the beneficiary on your insurance so that they don't pay the loan company in the event of loss.
Yeah, my payoff quote is what I used to calculate what I owe. I am not sure of any prepayment penalty, but I do have it in mind. I remember the salesman saying something about carrying the loan for at least 12 months to avoid a penalty, but I am not positive.

How much can the penalty be? Not a few thousand right?
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Old 02-07-2012, 09:26 AM   #4
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When I paid off my car and got the title the state made me get new plates. I don't know if this applies in NY.
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Old 02-07-2012, 09:28 AM   #5
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When I paid off my car and got the title the state made me get new plates. I don't know if this applies in NY.
That would devastate me. I love my custom plate and I've had plenty of nice comments from other Mazda fans.
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Old 02-07-2012, 09:33 AM   #6
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I've never heard of needing new plates after paying off a car loan.

For what its worth, I've paid off 4 car loans early with zero penalties. They were all from different lenders too.
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Old 02-07-2012, 09:37 AM   #7
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Had a 88 rx7 as my first car. Loved that sucker. Those rotary motors are awesome.
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Old 02-07-2012, 09:39 AM   #8
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In my state (Ohio), you would only need to change plates if you were converting a lease to a purchase.
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Old 02-07-2012, 09:58 AM   #9
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I have paid off a Toyota and a Honda early through their manufacturer financial services, and there were no penalties. Did both online as well.

I'd check your contract to make sure about any pre-payment penalties though.
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Old 02-07-2012, 10:00 AM   #10
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Some loans calculate your remaining interest off you last payment. My last loan I paid all but 300 dollars off at once then made the last payment for the lowest taxable amount.
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Old 02-07-2012, 10:24 AM   #11
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Quote:
Originally Posted by amdhunter View Post
My questions are:

What happens if I pay off the $1000 left over online instead of mailing them a check? Will I cause myself a problem?

Will I get the title to the car right away, or do I have to pay extra for that?

Is there any break on insurance at all from moving to ownership from financing?


I want to call Toyota to find out what the heck, but I really don't want to do it from my work desk or until it says $1000 left.
Banks sometimes have different dept/mailing address for the final payment. Not sending to the correct place/dept and the right amount can delay things and delay the title/lien release. It's best to just follow their instructions for final payment.

In the past I received the title in about 10-14 business days after the final payment

You get no break on insurance from not having a lien on the car or house. But you're free to carry the bare minimum insurance on the car if you own it outright which can save you money. Financed cars you have to carry full coverage with set deductible. Be sure to call your insurance to let them you paid off your car so they can remove the bank name.
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Old 02-07-2012, 10:47 AM   #12
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Hmm, I didn't notice you stated the lender was Toyota Financial Services. I made my final payment with them online and didn't have any issues. This was back in '08 I think.
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Old 02-07-2012, 11:13 AM   #13
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Quote:
Originally Posted by ponyo View Post
Banks sometimes have different dept/mailing address for the final payment. Not sending to the correct place/dept and the right amount can delay things and delay the title/lien release. It's best to just follow their instructions for final payment.

In the past I received the title in about 10-14 business days after the final payment

You get no break on insurance from not having a lien on the car or house. But you're free to carry the bare minimum insurance on the car if you own it outright which can save you money. Financed cars you have to carry full coverage with set deductible. Be sure to call your insurance to let them you paid off your car so they can remove the bank name.
I'll probably raise my deductible to $1000 from $500 and lower my liability. I wasn't thinking about this. Should save a pretty penny.
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Old 02-07-2012, 11:16 AM   #14
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Quote:
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Hmm, I didn't notice you stated the lender was Toyota Financial Services. I made my final payment with them online and didn't have any issues. This was back in '08 I think.
Yeah, I bought my car at a Toyota dealership. Argued against the 5.9% and threatened to walk out after talking for 3 hours or so. They had to make it up by taking $3000 of the sticker.

KBB on the car was $28k when I bought it, and I snagged it for $20,200.
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Old 02-07-2012, 11:59 AM   #15
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Quote:
Originally Posted by ponyo View Post
Banks sometimes have different dept/mailing address for the final payment. Not sending to the correct place/dept and the right amount can delay things and delay the title/lien release. It's best to just follow their instructions for final payment.

In the past I received the title in about 10-14 business days after the final payment

You get no break on insurance from not having a lien on the car or house. But you're free to carry the bare minimum insurance on the car if you own it outright which can save you money. Financed cars you have to carry full coverage with set deductible. Be sure to call your insurance to let them you paid off your car so they can remove the bank name.
Mine didn't make much difference. I think it was something like $100/year to carry full coverage vs liability only. Being that my car is still worth over $6,000 it makes sense to keep full coverage on it.
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Old 02-07-2012, 12:15 PM   #16
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Quote:
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Some loans calculate your remaining interest off you last payment. My last loan I paid all but 300 dollars off at once then made the last payment for the lowest taxable amount.
This, at least in my experience. They want the interest right up until the microsecond your check arrives at their door.
My car loan terms stated that there was no penalty for early payment, but I bet that they'll want the same thing. The site for my student loans had a place to request a payoff quote, and they wanted to know the date that they would receive payment so that they could calculate the interest accrued up to that time. It's to ensure that they can get the most return on their investment, but probably also to prevent abuse. "You can stop sending me bills, I'm totally going to pay off the last $1000 I owe."
6 months later, you get around to sending in the $1000 check. They send you back a thank-you note, and a nice bill for the interest and late fees.
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Old 02-07-2012, 01:40 PM   #17
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Quote:
Originally Posted by Jeff7 View Post
This, at least in my experience. They want the interest right up until the microsecond your check arrives at their door.
My car loan terms stated that there was no penalty for early payment, but I bet that they'll want the same thing. The site for my student loans had a place to request a payoff quote, and they wanted to know the date that they would receive payment so that they could calculate the interest accrued up to that time. It's to ensure that they can get the most return on their investment, but probably also to prevent abuse. "You can stop sending me bills, I'm totally going to pay off the last $1000 I owe."
6 months later, you get around to sending in the $1000 check. They send you back a thank-you note, and a nice bill for the interest and late fees.
Makes sense. I'll ask them about this when the current payment posts. I don't want any surprises later on.

As for prepayment penalties, how high can it be?
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Old 02-07-2012, 02:22 PM   #18
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In 2007 I paid off my corolla 2 years early through toyota financial services. At the time I got my payoff quote online and had to make the payment through the phone since their online payment system wasn't able to do principal only payments. I didn't get a prepayment penalty and got my title two weeks later. Just call them and ask about the prepayment penalty. I doubt you have it since your loan is through the manufacturer and not through a bank.
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Old 02-07-2012, 02:30 PM   #19
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Hmm I might need to look into this as well. I'll be making my last payment in March through Nissan's loan department, and I don't recall anything saying that I can't continue to pay online.

EDIT:

I looked online, and when I submit a request for a payoff quote from NMAC, it gives me an address to mail it to. Is there anything like that for you?

Last edited by Aikouka; 02-07-2012 at 02:33 PM.
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Old 02-07-2012, 03:11 PM   #20
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When I made my last payment, I used the calcutor on their site for the last payment and paid that. After it cleared it said I owed a penny! I was unable to pay the penny only in their system because min. Payment was $1.

I called and whined about it. They told me the system does that for final payment and your need to wait for the next payment cycle for it to clear. So 30 days later, it has a zero balance.
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Old 02-07-2012, 03:19 PM   #21
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I looked at mine.

Chase: Payoff Quote > Pay Via Mail
" Transactions posted to your account after you received these payoff quotes may affect the final payment amount (for example, if you have a payment returned or fees added to your account). We'll release our lien on any collateral for your account when you've paid off your loan and any fees in full. "

I had a loan, previously directly from Mazda Credit and all they provided was the payoff quote and no instructions on paying via mail.
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Old 02-07-2012, 05:07 PM   #22
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Quote:
Originally Posted by amdhunter View Post
Makes sense. I'll ask them about this when the current payment posts. I don't want any surprises later on.

As for prepayment penalties, how high can it be?
Anything like that should be outlined in the loan terms.

I specifically looked for that in my loan terms before signing anything - no penalty for early payment.
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Old 02-07-2012, 05:19 PM   #23
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Quote:
Originally Posted by JulesMaximus View Post
Mine didn't make much difference. I think it was something like $100/year to carry full coverage vs liability only. Being that my car is still worth over $6,000 it makes sense to keep full coverage on it.
I'm going to keep full coverage, but I have like 300/500k liability. No need for that. lol
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Old 02-07-2012, 05:21 PM   #24
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Quote:
Originally Posted by Aikouka View Post
Hmm I might need to look into this as well. I'll be making my last payment in March through Nissan's loan department, and I don't recall anything saying that I can't continue to pay online.

EDIT:

I looked online, and when I submit a request for a payoff quote from NMAC, it gives me an address to mail it to. Is there anything like that for you?
That's the only option I have. A mailing address. This is what is concerning me. As soon as my payment posts, I am getting on the phone. Maybe I can do the last payment with them then and there.

I don't want to send money in snail mail if I can avoid it.

Last edited by amdhunter; 02-07-2012 at 05:24 PM.
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Old 02-07-2012, 05:23 PM   #25
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Quote:
Originally Posted by Jeff7 View Post
Anything like that should be outlined in the loan terms.

I specifically looked for that in my loan terms before signing anything - no penalty for early payment.
I remember asking about that and was told I needed to go on for 12 months. I have NO idea where the paperwork for my car is right now...I usually keep these things in a folder, but it's not there.
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