Financing question

[mophead]

Can someone tell me what the delta is between getting $500 off price of vehicle = what % of loan financing. I'm wondering incentive for dealer discounting vs adjusting APR and how they get paid (make their money). Would assume they'd rather have their money sooner than later and give up their money later than sooner. I know I didn't pose the question right... I tried though.

 

[Tika]

are you wondering how much lower an interest rate needs to be to save $500

you can just use car loan calculator on google and it will show you how much interest your paying on loans......i believe 2% on 50k is around $2500 in interest in 60 months.....3% is $3900

 

[Eighty]

There are a lot of variables involved in order to give you a reasonably accurate answer.

• Length of loan (months)
• Loan amount
• Loan rate

A simple example would be:
$50,000 loan for 72 months.
3% rate will cost you $4,700
2.69% rate will cost you $4,200
That’s a $500 difference.

 

[mophead]

There are a lot of variables involved in order to give you a reasonably accurate answer.

• Length of loan (months)
• Loan amount
• Loan rate

A simple example would be:
$50,000 loan for 72 months.
3% rate will cost you $4,700
2.69% rate will cost you $4,200
That’s a $500 difference.

Yep that's zactly what I needed. Was having a schizm visualizing it. That's what they do all day everyday. I hate being at a disadvantage so I'm trying to "get it" so I can hit their knuckleballs.

 

[mophead]

are you wondering how much lower an interest rate needs to be to save $500

you can just use car loan calculator on google and it will show you how much interest your paying on loans......i believe 2% on 50k is around $2500 in interest in 60 months.....3% is $3900

I'm playing with a spreadsheet and I have and will play around more with rate and term. I'd say the GM's and F&I people are able to easily extrapolate parts of a point to the whole deal in their head. Take it here adds it there. That's what I want to be able to do on the fly. Considering taking the laptop with me so it can do the work. Trying to get there with old fart math skills and a brain that locks up. Thanks for your help.

 

[mophead]

Most of the sales contracts I've seen are convoluted messes. In my opinion it's on purpose to direct your attention from their add ons and interrupt a logical line of reasoning when adding costs. To their advantage. Jus sayin

 

[mophead]

How do dealerships get paid out of a loan? A onetime commission at the beginning of the term or over the term or at payoff/buyout? Do they split 50/50 with the banks or does it depend on referral number?

 

[Tika]

i would go in with a pre approval from a bank or CU.....it protects your interest rate and you will already know what your approved for....you have a baseline to start out.......good credit is around $13 per thousand and reg is $20 per thousand.....meaning payment vs amount financed.......they make their money several ways.....on financing they bump you up couple points from buy rate.....they buy at 2% and give you 4% for example......

as far as dealerships getting paid their a tons of ways.....but it doesnt really matter.......sell price, trade and interest rate are only concerns for customer.....everything else will take care of itself if those are good

 

[Tika]

i just had a sales contract with $3600 dealer disc, $2250 in rebates.....a hiked up MSRP and blah blah......but your right they are a mess......in the end, OTD price is all that matters, can give 2 ****s how they write it up......i turned last deal down, i dont visit a dealership until all numbers are set and we have a deal....if it changes i walk out, but definetly most of work is done prior to walking in.......bought 3 trucks in last 2 yrs

 

[mophead]

Yeah that's what I want to do. Cut through the BS, agree on the numbers upfront before I ever walk through the door. Gotta watch that hiked up MSRP in the contract, they'll charge you more tax that way, pay the state on another number and pocket the diff. Slimeballs.