Comments on: How does the finance person from the dealership I bought my car make his money? http://bigfinancialaffairs.info/how-does-the-finance-person-from-the-dealership-i-bought-my-car-make-his-money/88/ Financial Times for Financial People Mon, 29 Mar 2010 23:20:22 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: spifiman1 http://bigfinancialaffairs.info/how-does-the-finance-person-from-the-dealership-i-bought-my-car-make-his-money/88/comment-page-1/#comment-117 spifiman1 Thu, 17 Apr 2008 00:33:11 +0000 http://bigfinancialaffairs.info/how-does-the-finance-person-from-the-dealership-i-bought-my-car-make-his-money/88/#comment-117 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. 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.

]]> By: bill g http://bigfinancialaffairs.info/how-does-the-finance-person-from-the-dealership-i-bought-my-car-make-his-money/88/comment-page-1/#comment-116 bill g Mon, 14 Apr 2008 22:36:56 +0000 http://bigfinancialaffairs.info/how-does-the-finance-person-from-the-dealership-i-bought-my-car-make-his-money/88/#comment-116 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. 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.

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