How much is the dealer kickback if I finance
#1
Senior Member
Thread Starter
How much is the dealer kickback if I finance
...through Ford Credit with the new April incentives?
Someone said it was based on the Ford Credit rate and how much the customer would have qualified for on the open market. Is that true? If so, what's the kickback on say 2% open market vs 3.9% for 60 from FoMoCo?
Someone said it was based on the Ford Credit rate and how much the customer would have qualified for on the open market. Is that true? If so, what's the kickback on say 2% open market vs 3.9% for 60 from FoMoCo?
#3
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Doofus (04-06-2015)
#5
Senior Member
Finance kickbacks from the lender to the loan originator (dealer) are known as dealer reserves and typically run 2-4% above market rate, i.e. the dealer receiving the difference between the market rate and the loan rate. According to NADA, dealer reserves are the largest source of dealer sales income, far exceeding profit on the vehicle.
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Doofus (04-06-2015)
#6
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Doofus (04-07-2015)
#9
Dealers get either a flat pay for financing if they use the buy rate.. buy rate equals the rate you actually qualified for with no mark up. This can be a small % to only a few hundred dollars it depends on the bank. Where many dealers make money on financing is in lieu of taking the smaller flats they instead bump your rate .5- 3% and depending upon the amount financed this can add up to significant $$$. They would get the difference between what you qualified for say 2% and the marked up rate say 3.5% which would represent a 1.5% mark up in this case.
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Doofus (04-07-2015)