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Smart Shopper Credit Scores and Vehicle Financing
935 messages, Last post on Jul 28, 2009 at 1:12 PM
You are in the Smart Shopper Forum. Your Hosts are kirstie_h & tidester
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Replying to: tidester (Sep 16, 2007 12:13 pm)
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Replying to: master_ryu (Sep 15, 2007 4:30 pm) And no, the dealer didn't even TRY to beat my CU. He said it was much better than he could do even with an 800+ credit score.
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Replying to: delta737h (Sep 16, 2007 12:52 pm) OK. We'll let it go this time....  Yeah - another poster got a question sandwiched in there. That happens a lot. Your question is sort of out of my league. |
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Replying to: delta737h (Sep 16, 2007 9:07 am)  It depends on the lender but the norm is called a 75/25 split. If the bank rate is 8% and I charge 9% I make a 1 point spread and I get 75% of the 1 point, the bank gets the other 25%. If the customers pays off the loan in the first 90 days then I get charged back the 75%, on the 91st day there are no charge backs For Example $25000 loan at a buy rate of 7% 60 months. That works out to $4701 finance charge. If I charge 8% in order to make a point that raises the finance charges to $5414.60 The difference in the finance charge is $713 and the dealer gets 75% of that which means the dealer makes $535 in reserve. |
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Replying to: featherz (Sep 16, 2007 1:33 pm) By the way, I guess this is for everyone. How good of a rate is 5.75 % for four years? Thanks.
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Replying to: master_ryu (Sep 17, 2007 9:52 am) Dealership wants to get paid. If they submit you to a regular lender,and you are approved,the contract is overnighted to the bank,and the dealer is paid electronically. 3 days tops. |
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Replying to: joel0622 (Sep 17, 2007 8:19 am) Many thanks for your response. So basically, your dealership computes the reserves as a percentage of the Total Finance Charge Differential as follows... 1st. Compute the total lease charge based on the contract rate. 2nd. Compute the total lease charge based on the buy rate. 3rd. Subtract the amount in (2) from the amount in (1). 4th. Multiply the amount in (3) by 75% to determine the reserve payment. My gut tells me that this is the most common method. Once again; many thanks Joel. John
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Replying to: delta737h (Sep 17, 2007 10:32 am) On a lease if the lease rate is 2% and we charge 3% then I take the difference in the payment X the term X 75% and that is what we get. For example if at 2% the lease payment is 350 for 36 and at 3% it is 365 for 36 I take the difference in payment of $15x365=$540x75%=$405 in dealer reserve.
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