04-17-2024, 07:29 PM | #1 |
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What is a dealership's incentive to not take cash/outside financing?
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 |
04-17-2024, 07:35 PM | #2 | |
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I hate the independent dealer model.
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04-17-2024, 07:42 PM | #3 | |
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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. |
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04-17-2024, 07:47 PM | #4 | |
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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.
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04-17-2024, 07:52 PM | #5 | |
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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.
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04-17-2024, 07:53 PM | #6 | |
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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.
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04-17-2024, 09:08 PM | #7 |
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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.
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Marius1585140.50 jetblackcoupe167.50 |
04-17-2024, 09:22 PM | #8 |
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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.
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04-17-2024, 09:28 PM | #9 |
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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.
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jetblackcoupe167.50 Marius1585140.50 |
04-17-2024, 09:55 PM | #10 |
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Oh, you teased us with the color. What did you get?
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04-17-2024, 10:37 PM | #11 |
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04-17-2024, 10:49 PM | #12 |
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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. |
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04-17-2024, 11:32 PM | #14 | ||
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Nope. And thanks to truth in lending laws this will be abundantly clear when you review the loan docs.
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04-17-2024, 11:44 PM | #15 |
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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
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04-18-2024, 07:06 AM | #16 | |
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04-18-2024, 11:57 AM | #17 |
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What 'Cane says. 100%. I'm spiteful and would let them know after I refinanced it and never purchase anything from them again.
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04-18-2024, 11:59 AM | #18 |
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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.
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04-18-2024, 11:59 AM | #19 | |
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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. |
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jetblackcoupe167.50 Marius1585140.50 |
04-18-2024, 05:47 PM | #20 | |
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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?
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04-18-2024, 09:31 PM | #21 |
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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.
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04-18-2024, 10:06 PM | #22 | |
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