Originally Posted by probono

IMHO, it really doesn't matter what someone else is making...all that matters is what you are paying. Assume the dealership is making half of the interest you are paying...do you care? Just like buying the car, go to the dealer with the best alternative offer you can find and see if it's at least matched. In my case. my credit union will provide me with a 1.75% rate for 60 months...can my dealer beat it...time will tell.

Beat it, and they have my business...don't really care how much they take, because 1.75% is the best I can do....

But...how much do they make? My guess is about 25 basis points.....

Ken

Originally Posted by MikeyTX

Sure it matters. If the dealer is making $1k off the loan, I want part of that. If I'm going to be a loan ***** because of my fico score, I'd better see the dock fee go away and or my trade value go up. I pay less in taxes that way.

Originally Posted by Mfserge

There are laws in place to prevent the payment of "kickbacks" or commissions to non approved lending institutions in order to mitigate consumer fraud. Call your State Department of Banking and ask them if car dealerships are allowed to receive a commission from lending institutions then see if they will provide any details.

Originally Posted by nmvettec7

MikeyTX:

I doubt the dealer will reveal that info. But you could try. It's part of doing business in the automotive world of buying a car.

If your going to finance, then get rates from your banker or credit union first, and skip any financing with the dealer. I doubt the dealer will give up any part of the finance deal.

In addition, they can't cut the doc fee's. They are required to charge all customers the same in the state that they do business in.

Texas has no cap on doc fees, according to the Texas Automobile Dealers Association. Average Doc fee in Texas is just $125.00.

Here's the current Auto Loan rates as seen on bankrate.com. I would think with a good good credit score ( FICO) you can beat these rates at your bank or a credit union.

Bank of America is currently as low as 1.99% for 60 months.

Check interest rates here:

http://www.interest.com/auto/rates/

Wells Fargo Auto Loan rates:
https://www.wellsfargo.com/help/faqs/auto-loans/

As you can see, rates vary quite a bit from lender to lender. At least you have some idea what your dealing with. Your best bet is always the financial institution that yhou current;y deal with.

Hope this info helps.

Originally Posted by MikeyTX

I am simply looking for bargaining ammunition. In essence, if I let the dealer place me with a lender, I'd better get something out of it !

Originally Posted by MikeyTX

Interesting info. I do not need to finance however. I know that the f&i peep will try to get me to because I've never had credit issues. I am simply looking for bargaining ammunition. In essence, if I let the dealer place me with a lender, I'd better get something out of it !

Originally Posted by Mfserge

Instead of worrying about whether or not the dealer gets paid on your loan and if you can swindle a piece of that action, you should read a book on bargaining. You don't need to finance, which means you probably have enough money to pay cash. why take $60+k out of your account when you can borrow someone else's money for 3% or 4% and use your own money for actual investments rather than a depreciating asset.

Do you tell your insurance agent you want a piece of their action? Did you tell the person writing your mortgage that you want a piece of their livliehood? Wherever you keep your piles of cash, those people are using your money to make a whole lot more money than their giving you, do you ask them for money? Do you tell your supermarket manager that you want money back because he paid $0.50 for bananas and you paid $0.99?

You should conjure up a better bargaining tactic than trying to go after a potential commission that they may or may not receive on your loan.

Originally Posted by MikeyTX

Must not by cars often do you ? If I can squeeze an extra $500 to $600 out of the deal, that is less I pay in taxes and just that much more I can reinvest in the stock and bond markets. Btw, 3 to 4 % interest is like paying juice as far as I'm concerned. I did not get where I am today financially by giving it away.

Originally Posted by MikeyTX

Must not by cars often do you ?

Originally Posted by Ernest_T

maybe you can negotiate for a free pair of fuzzy dice too.

Originally Posted by nmvettec7

I am not certain where you come up with this stuff of "dealer yield spreads". The dealer is not in the business of carrying paper for lending on automobiles. They are "not" in the game to play the direction of interest rates, they are not in the lending business. They act as a "third party" and simply secure the loan agreements between the customer/consumer to the bank, credit union, etc. They do paperwork, and have a vast inventory of banks and credit unions that they do business with to provide customers with a choice of lenders. Car dealerships "do not" set auto loan rates. If it's a GM product most likely their #1 lender will be Ally Bank which recently changed it's name from GMAC (General Motors Acceptence Corp). Look it up, do some research!

Can you imagine a large dealer playing the role as a lender and then having to repossess automobiles when payments are not made. Dealers sell cars. There are some dealers (very small time used car dealers that will assume risks by lending on what they sell, but this is very few and far between and it won't be a dealer selling new Corvette C7's).

Ask the big players in Corvette sales, "Do you carry the loan/lending paper on new Corvette's? Do you act as the banker/lender and hold the note?"

Ask Kerbeck, ask Coughlin, ask MacMulkin, ask Les Standford. They will tell you NO!

To educate yourselves, here's a link that educates in simple understanding language how auto loans work. Read it! There are many others links and websites that explain this process.

http://www.carsdirect.com/auto-loans...interest-works

As for trying to determine what a dealer makes by handling the paperwork, securing the loan for the lenders and completeing the final paperwork, should not be a "dealbreaker" for any customer or consumer. The dealer earns a fee for the work they complete for the lender. The dealer has NO responsibility to the lender if any consumer defaults on their car payments to the lender. The lender accepts full responsibilty for the loan and repayment of the loan, not a car dealership. Be assured you will required to sign many documents between yourself and the lender, not the dealership. Do not just sign, be sure to take time to read the contract and ask questions. If you don't fully understand the lending process and policies of the lender you are dealing with, ask questions.

Keep in mind that there are shady dealerships out there. Scams do happen. My advice is to cross check interest rates with the lender directly to confirm the dealer is on the same page as the lender as far as rates. It is always best to try to secure any loan or lending direct with your bank or credit union, and be sure to know your own credit scores (FICO). The lower the score the higher the rate you will be charged when securing a loan of any kind, automobile or otherwise.

Be sure to acquire and learn factual information before making assumptions as to "dealer yield spreads" and other areas that you may not be privy too or fully understand. Misinformation can mislead other forum members greatly.

Originally Posted by [B

boxster99t[/B];1588990077]Not that it matters, but I am in-house legal counsel for a captive auto finance company & have 26 years experience in auto finance, leasing, and floor planning of automobile and truck dealers, at the consumer as well as dealer level. What I briefly described in my post is not misinformation. Have a great day!

Originally Posted by Ernest_T

I'm thinking you don't buy many cars since you seem to have a very inflated idea of how much a dealer gets back from the bank for financing. At 1.65 %, which is a rate you should be able to get with your oft mentioned stellar FICO score, you are only going to pay $2800 in interest over the 66 months of the loan so there's no way the bank is giving the dealer $1000 as you stated in one of your posts above. You don't seem to understand what document fees are--the state of Texas requires those so your dealer can't discount them. Good luck with your purchase, maybe you can negotiate for a free pair of fuzzy dice too.