Here is the deal. I kind of got taken from the untrustworthy Persian gentlemen who did the financing for me during my internal Honda dealership. So he got me for the aloft seductiveness rate, lied to me so I would squeeze things similar to lengthened guaranty as well as opening insurance. My subject is this: Based upon my strange loan the sum loan volume of my seductiveness would have been similar to $12,000 widespread out over 6 years. But I went forward as well as paid the vast apportionment of which down as well as refinanced with the third celebration – thus shortening the sum seductiveness to something like
$3500 over 4 years. So here is my question. Does this prejudiced financial man during the dealership get the cut of the strange $12,000 as well as get his income up front? Or will he usually get the cut of the sum volume of seductiveness I paid upon the strange loan which was about $1300? I wish to know if by refinancing by a little alternative lender if I took income divided from him which he was awaiting would come to him formed upon the conditions of the strange loan?
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{ 2 comments… read them below or add one }
It depends on the dealer and how long you waited to re-fi.
You were correct in your assumption that he made a pretty penny on you from all the extras especially the extended warranty and how much he was able yo get you to pay for it. These guys have allot of flexibility in what they charge for these types of extras.
Auto finance is what I do for a living and like the first poster said, it depends on how quick you refinanced.
If you made at least 12-payments, the F&I guy got all of his money. If you made less then that he was charged back a small percentage.
When you finance a car and buy what’s called back-end product like Gap and Service Contracts the F&I people are paid a percentage of the profit they made off of you the next month. If you do not refinance within 12-months they are free and clear, if you do refinance, they are charged back a percentage based on how quick you refinanced.
The other way that F&I people make money is they mark up the rate. Say the bank gives the dealer a buy rate of 5.99% they mark it up to 8.99% and this produces whats called reserve money. This also gets charged back if you refinance the loan before 12-months.
I doubt if he actually lied to you. People that do what we do for a living are good at our jobs and lieing to a customer is the fastest way to lose your job. The truth in lending law states that everything you purchase must be explained before you sign the paperwork.