06-13-2022, 04:47 PM | #1 |
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How does loan amount affect the dealer?
Dealers apparently prefer that you take out a larger loan with the car. What's the difference in what the dealer gets if I take out a $10k vs $40k loan on a new car?
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06-13-2022, 10:38 PM | #2 |
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some banks give the dealer a percent of the amount financed to get the loan business from them, other banks give them a flat fee.
talking about a percent or two, it's not a large amount. but, the more you finance, the bigger the finance charges are for the life of the loan. |
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06-13-2022, 10:47 PM | #3 |
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I was asking my CA if there is a minimum loan amount with BMWFS and he said it was 10k, "but we'd hope (ask) you'd take a larger loan amount".
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06-13-2022, 10:55 PM | #4 |
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The finance manager doesn't get paid anything unless someone finances or buys a warranty, etc. They don't really like doing paperwork (their job) for free so yes, the more you finance then the more likely they can pay the rent so to speak.
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06-13-2022, 10:59 PM | #5 |
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The finance guys never love me because I never take them up on any of their offers. And on my last car they had assumed that I was going to only put $10,000 down. I didn't correct them because they never actually asked me until I got to the finance guy who was a jerk at baseline so I didn't mind the last minute surprise of telling him I was actually putting $60,000 down.
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06-14-2022, 09:08 AM | #6 |
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typically they get a percentage of the interest or the loan. if you get the financing through the dealer and not through a 3rd party, they get a higher percentage. Thats why a lot of times, in the past not really in today's market, you could get a better deal if you financed through them since they are making up that discount on the financing.
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06-14-2022, 09:21 AM | #7 |
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I believe the FS minimum is $7500.
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06-14-2022, 10:09 AM | #8 |
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Few dealers make money on financing, unless they are mousing the rate (selling it higher than they bought it). Typically this is not the case. There is a fee you pay for just walking into the office (usually $199 or so), even if you are writing a check for the vehicle. That covers the business office.
If your dealer is getting a kickback from a bank to get financing, or mousing the rate, find another dealer. |
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06-14-2022, 01:59 PM | #9 |
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Wow. And the dealers I go to usually suggest I take a loan from my local credit union because they have the lowest rates and no bank can touch those!
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06-14-2022, 07:33 PM | #11 |
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Oh yes it is. I'm just surprised because none of them have ever pushed me into taking a loan from them. I didn't know dealership/finance guys working there made money from getting customers to take a loan from there!
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06-14-2022, 09:45 PM | #12 |
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Literally EVERY dealer is making money off EVERY single loan they write. Unless you bring your own financing or cash, there's a cut for them.
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06-15-2022, 07:12 AM | #13 |
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I've worked for Toyota, Suzuki, Honda, Mazda, Nissan and Hyundai and I can tell you without a doubt that dealers do not always make money on the loans. If they sell the rate at buy then there is $0 made.
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06-15-2022, 07:37 AM | #14 |
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Some dealers are asking for 1% over the nationally advertised rated from BMW. If you challenge the finance manager and insist that they match the advertised rate they will usually agree. Unfortunately not all customers are savvy enough and the dealer pockets that extra 1%.
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06-15-2022, 08:04 AM | #15 | |
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Quote:
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06-15-2022, 10:22 AM | #17 |
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Well, from dealing with several now some definitely suck less than others. Unfortunately some of them (similar to so many companies) forget that customers are the source of their income.
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06-15-2022, 05:17 PM | #18 |
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I wonder what would happen if a customer filed an official complaint with BMWFS about a dealer charging more than the nationally advertised rate?
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06-15-2022, 08:58 PM | #19 | |
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Quote:
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