Re: I Can Help, I Run A Car Dealership
02-20-2012 08:53 AM
I've read in a car buying book that when a dealer gets an offer back from banks, that usually they will add a little bit to the APR that was approved. E.g., if a dealer sent apps and got back an APR of 4.7%, they will say that I'm approved for an APR of 5.7% (or any amount higher than the approved APR) ... is that true?
Yes it is. Depending on the term of the loan and the lender, the dealer can add as much as 2.5 points to a loan.
This seems so shady!!! By the way, do you do sales on new or used vehicles, and which brand do you primarily work with? Also, what do dealerships really think of "Cash" buyers.... if you are buying with cash, wire from bank or something similar.... is it best to keep this information to yourself until after you've haggled the price?
It's no different than a mortgage broker: they get you the mortgage, they get paid by the lender, and the cost somehow or another gets borne by you the consumer.
If I can get a loan from a bank for 20.7% (Roadloans), and in my case the dealer could get a loan for 16.85% and tack on 2.5% (which they may have done in my case) bringing me to 19.35% < 20.7%, why on earth am I going to complain that the dealer took a cut out of it? They got me a better deal, I'm absolutely fine with their making some money off it if I couldn't have gotten that on my own... and I tried in this case. Might've done better with a CU I used to use, but meh, live and learn, they have a shot to refinance me in another 4 months .
I just used a mortgage broker, and they got me a 4.375% rate, of which is great!! I had to pay in the discount points, which is their profit, but the $$ I paid in more than pays for itself for that 0.5% reduced rate on a 20 yr 175k loan.... I just hate when Dealerships try to screw the customer! I've experienced this in the past, and now, I'm at the point where I just work with one dealership....
My dealership of choice hooked me up with Credit Union financing which was half of what Ford Motor was offering. I think the problem lies with dealerships who aren't looking at a long term relationship with the customer, they are looking at their short term bottom line more than repeat business.
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