[jetblackcoupe]

Have an individual color 2024 G80 on its way across the Atlantic. Dealership is upcharging rate to 6.29% claiming that it was part of the deal to get the G80 at MSRP. They are claiming they won’t accept cash/outside financing but tell me I can sign then refinance down the road.

Is this common? I am assuming because M3’s are in high demand they have the bargaining power here.

What is their incentive exactly to do this if I can refinance soon afterwards? Do they get a kickback from BMWFS for an upcharged rate?

I know 1% isn’t the biggest deal but curious if anyone else has gone through this

[jimbethesda]

Originally Posted by jetblackcoupe

Have an individual color 2024 G80 on its way across the Atlantic. Dealership is upcharging rate to 6.29% claiming that it was part of the deal to get the G80 at MSRP. They are claiming they won’t accept cash/outside financing but tell me I can sign then refinance down the road.

Is this common? I am assuming because M3’s are in high demand they have the bargaining power here.

What is their incentive exactly to do this if I can refinance soon afterwards? Do they get a kickback from BMWFS for an upcharged rate?

I know 1% isn’t the biggest deal but curious if anyone else has gone through this

Kickback. I don’t know how common it is, I tell them upfront what I plan on doing (I usually pay cash). I’d walk if that was a requirement. My guess is if you tell them to F off they will back off. You’d have to be prepared to walk though.

I hate the independent dealer model.

[jetblackcoupe]

Originally Posted by jimbethesda

Kickback. I don’t know how common it is, I tell them upfront what I plan on doing (I usually pay cash). I’d walk if that was a requirement. My guess is if you tell them to F off they will back off. You’d have to be prepared to walk though.

I hate the independent dealer model.

Fair but for an individual order for which I’ve already given a deposit, my threshold to walk is a bit higher, especially with the “sign and refinance a few months later” option which seems to have few downsides.

I am just curious why they care so much about locking in higher rate at signing if refinancing quickly (I have heard after 90 days) is even an option.

[jimbethesda]

Originally Posted by jetblackcoupe

Fair but for an individual order for which I’ve already given a deposit, my threshold to walk is a bit higher, especially with the “sign and refinance a few months later” option which seems to have few downsides.

I am just curious why they care so much about locking in higher rate at signing if refinancing quickly (I have heard after 90 days) is even an option.

Because they still get the $$. The loan doesn’t need to go full term before they get their $$.

You actually have way more leverage with an individual order, but it’s your call.

Lesson learned, get everything in writing before you give a deposit.

[Marius1585]

Originally Posted by jetblackcoupe

Have an individual color 2024 G80 on its way across the Atlantic. Dealership is upcharging rate to 6.29% claiming that it was part of the deal to get the G80 at MSRP. They are claiming they won’t accept cash/outside financing but tell me I can sign then refinance down the road.

Is this common? I am assuming because M3’s are in high demand they have the bargaining power here.

What is their incentive exactly to do this if I can refinance soon afterwards? Do they get a kickback from BMWFS for an upcharged rate?

I know 1% isn’t the biggest deal but curious if anyone else has gone through this

I was in the same situation. They insisted on the upcharged 6.29 rate. I even straight up asked them "Wouldn't you rather give me the BMW 5.29 and I will keep the loan for the 60 months, instead of me refinancing a day after I pick up the car if you keep it at 6.29?" - and they said 'you're free to refinance but if you want the agreed upon purchase price, you need to finance through BMWFS at 6.29%.'

They didn't admit it, but the approach confirms for me that they get the kickback and some kind of a cash for selling the loan regardless if the loan matures or not. Super frustrating. But bottom line for me is that I will refinance to 4.95% and won't worry much about what they get or not get.

[John4C]

Originally Posted by jetblackcoupe

Fair but for an individual order for which I’ve already given a deposit, my threshold to walk is a bit higher, especially with the “sign and refinance a few months later” option which seems to have few downsides.

I am just curious why they care so much about locking in higher rate at signing if refinancing quickly (I have heard after 90 days) is even an option.

What deposit have you given and what documents have you signed? What are the terms of the deposit agreement?

If you want to be spiteful you can just refinance the next day. BMWFS has no prepayment provisions so you can do this and they won't get their money.

['Cane]

Originally Posted by John4C

What deposit have you given and what documents have you signed? What are the terms of the deposit agreement?

If you want to be spiteful you can just refinance the next day. BMWFS has no prepayment provisions so you can do this and they won't get their money.

This is the proper answer. Just take their deal and refinance it immediately, they won’t get their extra profit and you get the car for MSRP + whatever best rate you’ve got. And, make sure you don’t take any of their extras.

[jetblackcoupe]

Originally Posted by John4C

What deposit have you given and what documents have you signed? What are the terms of the deposit agreement?

If you want to be spiteful you can just refinance the next day. BMWFS has no prepayment provisions so you can do this and they won't get their money.

It was a 2k deposit for the individual order (common practice I hear). The only thing I signed was an initial credit application through BMWFS (which will be 90 days pre delivery). I did not sign anything that stated what APR I would get or any other financial agreement.

[BryanCO]

Common. A bit of a hassle to quickly refi but as long as they have been a good dealer, buy it, refi and everyone is happy.

[BryanCO]

Oh, you teased us with the color. What did you get?

[jetblackcoupe]

Originally Posted by BryanCO

Oh, you teased us with the color. What did you get?

Techno violet on silverstone

[Berzerker]

I was told that you need to keep the loan open for a couple months for them to actually get their kickback, so if you refinance immediately they don't get it. Not sure how true that is.

One of the finance managers threatened to charge me if I immediately refinanced which I knew was BS.

[jetblackcoupe]

Anything in BMWFS policy that states a customer has to wait a certain amount of time before refinancing?

[John4C]

Originally Posted by jetblackcoupe

It was a 2k deposit for the individual order (common practice I hear). The only thing I signed was an initial credit application through BMWFS (which will be 90 days pre delivery). I did not sign anything that stated what APR I would get or any other financial agreement.

If you didn't sign something that explicitly stated the deposit was nonrefundable, it's refundable. You can walk and get your money back. They may hem and haw but mention a lawyer and they'll give it back.

Originally Posted by Berzerker

I was told that you need to keep the loan open for a couple months for them to actually get their kickback, so if you refinance immediately they don't get it. Not sure how true that is.

One of the finance managers threatened to charge me if I immediately refinanced which I knew was BS.

It's usually 60 days. If it doesn't make it to 60 days they don't get the credit/commission. I think it may be more than just money. BMW may give dealers targets to hit for financing take rates that impact other things (I am speculating - could be 100% wrong). It's definitely money though; same way your mortgage broker gets a commission. They get a placement fee of sorts for selling the loan.

Originally Posted by jetblackcoupe

Anything in BMWFS policy that states a customer has to wait a certain amount of time before refinancing?

Nope. And thanks to truth in lending laws this will be abundantly clear when you review the loan docs.

[jetblackcoupe]

Honestly all things considered if it’s a matter of 60 days (2 payments) at 6.29% then refinancing at a credit union, it’s a $50-100 loss from that extra 1% APR they are salivating over. I’d pay that just to avoid the headache of the “I’m gonna walk away I swear” charade

['Cane]

Originally Posted by jetblackcoupe

Honestly all things considered if it’s a matter of 60 days (2 payments) at 6.29% then refinancing at a credit union, it’s a $50-100 loss from that extra 1% APR they are salivating over. I’d pay that just to avoid the headache of the “I’m gonna walk away I swear” charade

Don’t wait 60 days, do it the next day.

[Lupeskew]

What 'Cane says. 100%. I'm spiteful and would let them know after I refinanced it and never purchase anything from them again.

['Cane]

Originally Posted by Lupeskew

What 'Cane says. 100%. I'm spiteful and would let them know after I refinanced it and never purchase anything from them again.

Oh yeah, for sure let them know that their greed cost them a customer, especially on a MSRP deal. Plenty of dealers out there willing to do the right thing.

[Berzerker]

Originally Posted by jetblackcoupe

Honestly all things considered if it’s a matter of 60 days (2 payments) at 6.29% then refinancing at a credit union, it’s a $50-100 loss from that extra 1% APR they are salivating over. I’d pay that just to avoid the headache of the “I’m gonna walk away I swear” charade

It's not the APR they salivate over, as explained here, it's the kickback incentive and probably some other target quotas that matter more to them.

You're under no obligation to keep the finance open for any amount of time and there's no pre-payment penalties. I'd just not fight them and refinance it immediately after you take delivery and BMWFS funds the account.

[Vectors2final]

Originally Posted by jetblackcoupe

Anything in BMWFS policy that states a customer has to wait a certain amount of time before refinancing?

A search shows that this is a coercive tactic to get you to stay in the loan long enough for them to get their payout. In some cases, dealers "hold onto the paperwork" to delay the final processing of the loan, so the financier cannot initiate a payoff until the loan documents are filed.

In this case, BMWFS provides a simple interest loan, and there isn't a pre-payment penalty. I'm not sure there's much they could do, if anything, to keep you from refinancing. Even if they made you sign some sort of document stating you would be charged, I imagine that wouldn't hold up in court as the terms for pre-payment penalties are set by the banks, not the dealer.

I might be mistaken, but I don't think BMW offers any loan with a pre-payment penalty, and in many states it's illegal. Think of it this way: if you took delivery of your car and later that week—let's say a 100-year-old tree decided it was going to lay down for a little nap on your car and it was totaled—what would happen then?

[utsteve98]

Not sure how this is even a tactic. If you bring your own financing, it’s basically like buying the car cash. They get a check or direct deposit from your bank of choice. If your paying MSRP and already did a deposit, it isn’t their business or concern how you pay for the rest of the car.

['Cane]

Originally Posted by utsteve98

Not sure how this is even a tactic. If you bring your own financing, it’s basically like buying the car cash. They get a check or direct deposit from your bank of choice. If your paying MSRP and already did a deposit, it isn’t their business or concern how you pay for the rest of the car.

Many dealerships do this, it’s their way or no way. They don’t have to accept your offer of outside financing, the car will be easy to sell on their terms as soon as they usher you to the door. In these cases, the only way is to play their game, then one-up them when you’re home with your new car.