[E_R_S_M4_Comp]

My M4 is in status 150 and we are getting ready to lock everything. With the increases in interest rates and lease terms, I am seriously considering using my local credit union to finance the new vehicle since they will give me 1.99% for up to 7 years. When I mentioned this to my SA, she told me that the dealership was not accepting any external financing and that I would have to use BMW FS which is offering 2.49% currently.

Can they do this?

[vj123]

I dont think they can enforce their financing by law.

On the other side, if you dont take it, they can play games with MSRP as the car isnt yours until you sign the dotted lines.

[LuvMyE92]

Dealers make money on financing (kickback from the financing company/bank) and in this case, they don't want to lose it.

I don't know the laws in AL, but there's probably not one that says that they can't do this.

One thought is that you could push back, walk away, and see if they cave. Downside to that is, of course, that you could lose your new car.

Another thought is that, at only 0.5% difference, you're not talking about a lot of money (at least not per month) and it may not be enough to sweat over.

A third thought (yes, I'm on a roll this morning!) is that by the time the car arrives, interest rates may be much higher, so if you can lock in that 2.49% now, it may not be such a bad deal. I doubt that the CU will let you lock in today's rate against a loan a few months away.

I'll add, in reply to @vj above, that even if it *is* illegal for them to do this, by the time you can get a D.A. to press charges against them, go to court and win, you will have long lost the deal and the car.

[Jurama81]

I would reach out to your states attorney generals office department of consumer protection. They would likely know offhand if the dealer is acting in accordance with state laws.

[vj123]

Originally Posted by LuvMyE92

A third thought (yes, I'm on a roll this morning!) is that by the time the car arrives, interest rates may be much higher, so if you can lock in that 2.49% now, it may not be such a bad deal. I doubt that the CU will let you lock in today's rate against a loan a few months away.

My CU allows anyone to lock the rates for 60 days and are currently offering 1.9%. Even though its not much of a difference from 2.49% from BMWFS, i might use my CU as i have a good relationship with them.

[NightWriter]

This doesn't make any sense. If you use external financing, then your bank/CU will wire payment or give you a certified check, which to the dealership is identical to a cash transaction. I can't imagine what their basis for refusing that would be, unless they're saying they won't accept cash either? In which case, that seems like a load of horseshit and I would concur with Jurama81's advice.

[vj123]

Originally Posted by NightWriter

This doesn't make any sense. If you use external financing, then your brank/CU will wire payment or give you a certified check, which to the dealership is identical to a cash transaction. I can't imagine what their basis for refusing that would be, unless they're saying they won't accept cash either?

Even though OP might get a cashiers check or wire transfer with a third party financing which is similar to cash, they are try to play games as they dont want to loose their kickback from the lender. A little push with the CA or SM might help.

[merlin3008]

To my knowledge there few if any laws that would compel a dealer to work with another bank. A dealer can't refuse money, but they can refuse to work directly with your institution. If you can find a bank that will fund the loan to you in advance of the purchase, you would basically be paying with cash as far as the dealer is concerned. The dealer can't refuse a cash sale. I'm sure that is very normal for bank to hear.

This is analogous to doctors who don't take insurance. It's not that you can't file a claim with your insurance for the service. It's just that the doctor won't work with the insurance company to get payment directly.

[modat]

Penfed sends you a check which you pay the dealer with. Same as cash for them.

[E_R_S_M4_Comp]

Called the Attorney General's Office for Alabama and they said that. They did not have an answer (and have never been asked that question). They pointed me to the Alabama Auto Dealers Association. Waiting for them to call me back.. I am not optimistic given the AG response.

[Hendo741]

Pretty sure the dealership holds all the cards. They have the right to refuse service, set the price, and pretty much dictate terms. Personally in that scenario I'd finance with BMWFS and immediately refinance. Better than risk losing the car imo.

[merlin3008]

Just curious...how has your relationship with the dealer been otherwise? How long was your wait for an allocation? Are they charging a markup?

[JerseyG80]

Originally Posted by E_R_S_M4_Comp

Called the Attorney General's Office for Alabama and they said that. They did not have an answer (and have never been asked that question). They pointed me to the Alabama Auto Dealers Association. Waiting for them to call me back.. I am not optimistic given the AG response.

I highly doubt that's accurate. I would email the GM, cc BMW corp and ask for clarification. While we think CA's are very knowledgeable and most are, a lot of them don't know shit!

[E_R_S_M4_Comp]

Originally Posted by merlin3008

Just curious...how has your relationship with the dealer been otherwise? How long was your wait for an allocation? Are they charging a markup?

Pretty good. I've been with them for over 10 years. I think it was about 3 weeks and I received my allocation and they are charging MSRP. No markup whatsoever.

[SpeedyATL]

Originally Posted by E_R_S_M4_Comp

My M4 is in status 150 and we are getting ready to lock everything. With the increases in interest rates and lease terms, I am seriously considering using my local credit union to finance the new vehicle since they will give me 1.99% for up to 7 years. When I mentioned this to my SA, she told me that the dealership was not accepting any external financing and that I would have to use BMW FS which is offering 2.49% currently.

Can they do this?

By your location, I assume your dealer is there in Huntsville, right? That's who I have a pending 440CV order with. My deal was negotiated and struck in Nov of 2021. About a month ago (well after my car was ordered and even built) when communicating with my CA, she told me no outside financing. I almost blew a gasket. She said it's a new policy that was not in effect when we agreed my deal.

Two weeks ago I sent the CA and the Sales Manager a stern e-mail about this and a couple of other issues I'm having in working with them (this is my 3rd car purchased from them) and nothing but crickets.

I'm going to go further up the ladder as my car gets closer to arriving, but I am so disappointed in this dealership. My first two cars were pretty easy and this one has been a real pain in the ass.

Watch your back, who knows what other "new policies" are waiting to bite us in the back side...They have taken what should be a fun and exciting process and made it a nightmare. If they think I will EVER buy another car from them, they are sorely mistaken.

[LuvMyE92]

Aside from the wisdom of taking legal advice from an anonymous web forum, I think that some of you guys need to take a chill pill.

We are in a seller's market right now. Don't like the deal that you made? Fine, there are 20 guys behind you ready to snap up that allocation for MSRP.

[Besharaf]

What would it matter to them? Wouldn't it be the same as buying cash? If they ask you, just say you're bringing a check. Am I missing something?

[50shadesofhockenheim]

Originally Posted by Besharaf

What would it matter to them? Wouldn't it be the same as buying cash? If they ask you, just say you're bringing a check. Am I missing something?

They make a lot more money when doing in house financing. Paying cash means they are missing out on money

[Besharaf]

Originally Posted by 50shadesofhockenheim

They make a lot more money when doing in house financing. Paying cash means they are missing out on money

Super shady, I'd still finance them,then refinance even though it is a hassle. I was upfront with my CA and told him I'll bring the check so hopefully it's not a common theme

[vj123]

Originally Posted by Besharaf

What would it matter to them? Wouldn't it be the same as buying cash? If they ask you, just say you're bringing a check. Am I missing something?

Had OP had communicated that he was going to pay cash from the beginning, they might have been fine. But he is going to finance it with a third party and his dealer might not want to loose the commission from their inhouse lender.

[50shadesofhockenheim]

Originally Posted by Besharaf

Super shady, I'd still finance them,then refinance even though it is a hassle. I was upfront with my CA and told him I'll bring the check so hopefully it's not a common theme

You think it should be fine if your CA knows but you never know. I've always read advice that says If you plan on paying cash for a car, negotiate the price of the car first, then let them know it's a cash deal

[bioman]

Did they run your BMWFS app earlier in the build process? If so, perhaps ask them to call BMWFS and match the rate?