A question for those you who work in sales/finance at dealers.

[OkieSnuffBox]

When the car is financed through the dealer, I know they get a kickback on the rate as it's always a just higher than you can get through your own financing.

Do they get their say, 1.5% of the rate at the time it's written? Or is it over the life of the loan that say the bank cuts them a check every quarter or something?

[MacSpeed]

They usually get it immediately but there's usually a claw back if you pay off the loan within 30 or 60 days. (I worked in a dealership for 4 years about 10 years ago)

[OkieSnuffBox]

Originally Posted by MacSpeed

They usually get it immediately but there's usually a claw back if you pay off the loan within 30 or 60 days. (I worked in a dealership for 4 years about 10 years ago)

I kind of figured that. Either way, I'll likely still immediately refinance it since I can get a rate from PenFed lower than anywhere else I've seen.

[MacSpeed]

Originally Posted by OkieSnuffBox

I kind of figured that. Either way, I'll likely still immediately refinance it since I can get a rate from PenFed lower than anywhere else I've seen.

That was my plan too but my dealer was able to match PenFeds rate though BOA so have just left it.

[Tcoat]

My wife has done the finance cars/RVs for 30 years. The amount she makes on each deal can vary wildly. It all depends on if there were any dealer bank deals on, what bank would actually even finance the customer (it isn't jut one bank at each dealership), the total amount, if it is raining out, if the moon is in the seventh house and Jupiter aligns with mars, if the bank managers fish just died and probably another million variables that the bank doesn't tell her until it comes up.
In all cases the bank pays the dealership upon delivery of the vehicle RV to the customer.

Oh and yes they claw it back if paid off in full so it is a total d1ick move to pull to finance through the dealer and then pay it right off.

[2020BRZtS]

I got a present when I financed mine. I went to my bank and they offered 3.25%. Subaru's best advertised rate was 2.99% and when we went to sign it was 2.74% written through my own bank. Maybe because I went 48 months but the finance guy was taken aback.

[Flipp]

Was the same for me. My credit Union had a special and offered me 2.9% 72 months. The dealer was able to give it to me for 1.99% 60 Months. I dunno if he still made some money out of that deal. Also was able to get the car just 500 over sticker, so not bad.

[Desertnate]

For me the promotional interest rates offered are usually slightly lower that what the banks I do business with offer. Sometimes only a a couple of a points lower, but they are lower.

I've also come out on top by pitting the finance department against my bank. If they can beat my banks interest rate, I'll go with them. In one instance it worked in the dealerships favor. Many time where there were no promotional rates, the dealership simply admitted they couldn't touch the rates from my bank.

I do feel for the dealerships in those instances. It's stuff like F&I and Service are major income sources, and they loose revenue every time they we go with our own banks.

[OkieSnuffBox]

Originally Posted by Tcoat

Oh and yes they claw it back if paid off in full so it is a total d1ick move to pull to finance through the dealer and then pay it right off.

They only have themselves to blame, IMHO. They required that I put down a non-refundable deposit, which I've never had on 2 previous cars ordered. Including my '15 BRZ, '13 Mustang GT track pack. Then gave me the following choices:

1. Pay their ADM.

or

2. Only take whatever financing they will provide.

If they actually provide a competitive rate (I'm 40 with an 830+ credit score), I'll be happy to just let it ride with them. If they try to get me for 2-3% above what I know I can get elsewhere, then I will quickly refinance.

[Tcoat]

Originally Posted by OkieSnuffBox

They only have themselves to blame, IMHO. They required that I put down a non-refundable deposit, which I've never had on 2 previous cars ordered. Including my '15 BRZ, '13 Mustang GT track pack. Then gave me the following choices:

1. Pay their ADM.

or

2. Only take whatever financing they will provide.

If they actually provide a competitive rate (I'm 40 with an 830+ credit score), I'll be happy to just let it ride with them. If they try to get me for 2-3% above what I know I can get elsewhere, then I will quickly refinance.

Ya that is sort of extorsion and a different kettle of fish.

[Tcoat]

Originally Posted by 2020BRZtS

I got a present when I financed mine. I went to my bank and they offered 3.25%. Subaru's best advertised rate was 2.99% and when we went to sign it was 2.74% written through my own bank. Maybe because I went 48 months but the finance guy was taken aback.

It is fun when we buy a new car. Since my wife is in the industry we go in and she does all the talking. After a half hour or so of the two of them speaking some sort of techno gibberish we walk out with a far better rate than anything posted. We always save huge over what we (read I) are told up front. Not to mention the extras she get's like the $100 ten year extended warranty with 12 free services on my Hakone.

[OkieSnuffBox]

Originally Posted by Tcoat

Ya that is sort of extorsion and a different kettle of fish.

Now granted they didn't word it that way. But when the sales guy came back and said they'd removed the ADM, the purchase agreement explicitly stated, "No outside financing will be accepted for this vehicle."

Or as Dennis would say, "It's the implication."

Add in the non-refundable deposit.........both the previous vehicles I custom ordered as mentioned, it was a refundable $1k deposit.

[Tcoat]

Originally Posted by OkieSnuffBox

Now granted they didn't word it that way. But when the sales guy came back and said they'd removed the ADM, the purchase agreement explicitly stated, "No outside financing will be accepted for this vehicle."

Or as Dennis would say, "It's the implication."

Add in the non-refundable deposit.........both the previous vehicles I custom ordered as mentioned, it was a refundable $1k deposit.

I don't have a problem with the deposit as long as there is a documented deal including trade in value and fully loaded price (all fees and such) at an agreed upon rate. Not a hope in hell I would pay a deposit based on "we we settle everything when it comes in" though.
As mention earlier though the "non refundable" deposit only applies if the car shows up and the buyer says i don't want it now. Any such deposit should have a time limit. My local dealership doesn't even stock the 86 (as far back as 2017). They just got sick of tire kickers and people that wanted them for below cost so give their allotment away. If you want one you have to order with the non refundable to prove you are serious. Now, when there were any available they would just bring whatever was ordered in from another dealership so the wait was not long. That is what I had to do with the Hakone. They brought it in from across the country after I paid the deposit.

[quikag]

Only time I finance is if there is additional rebates financing through the captive financing arm of an automaker. I will let it ride too if the F&I guy is honest with me, but if they screw me on rate, I'll pay it off shortly thereafter.

Happened with a new Sierra truck purchase a few years ago and a $1500 rebate for financing through GMAC or whatever it's called nowadays. Dude told me 6.5% was the best he could do and I'm also 40+ with a 800+ FICO. I find out a few days later online many people got 4-5% and I realize he juiced me and lied about it. I was going to let it ride the 60 or 90 days (whatever he asked me to do so he could get his commish), but...

I paid the loan off less than week later. Screw him.