Indirect Financing Buy-Rate versus Sell Rate
Indirect Financing Buy-Rate versus Sell Rate
Are you sure the rate given to you from the auto dealer is the lowest rate available to you?
If you do not believe it is, then you should do some comparison shopping. The lender will quote the dealer a "buy rate" which is the rate the lender is actually charging the customer. Many times, however, the lender will also supply the dealer with a "sell rate", which gives the dealer the opportunity to make backend points on the loan.
Example: Loan is quoted by lender at 12% buy rate - 14% sell rate. If the dealer can sell you the car for $20,000 at an interest rate of 14%, the dealer just made an extra $280 on your loan.
