[wtb1313]

I was doing some research and found examples of dealerships giving buyers a problem with processing and accepting outside financing, say from Capital One.

Has anyone experienced pushback using online financing where the dealer refused to process directly with the bank because the dealership be obliged to obtain the rate?

A quick google search reveals some disturbing perspectives.
https://www.google.com/search?q=deal...&client=safari

I’m curious if anyone experienced this and if there really is no workaround. I’m not sure I fully understand why and how exactly a dealership is functionally precluding a buyer from using any other financing but their own? Seems extremely corrupt and almost form of gouging or price manipulation.

[captain slowly]

not sure the point of your thread. Are you in a process of buying a bmw and have a problem with a dealer?

[c1pher]

I have never had a problem with how I pay. I’ve heard of this happening but only once did I quasi have this situation. I was planning on purchasing an almost new 718 at a Mercedes dealer and while I agreed to let them run my credit, they claimed they couldn’t process my information for some odd reason and the only way to get the car was to put 20% down and take a 9% loan. I had already put a $2500 deposit on the car. I was almost certain I was going to get the car so my wife had left. I wasn’t going to take the car under those conditions so had to call my wife to come back. The GM was acting all kinds of upset and saying how I was backing out of my word etc. Took them almost a month to give me my deposit but I finally got it.

Bottom line, if you don’t like the terms of the deal, don’t accept it. You can always find another one to your liking.

[SpaceGhost]

Our local dealer will only allow customers to use one of their preferred outside lenders. They claim some lenders are difficult for them to work with etc. Likely BS on their part. They are the only BMW place in town so they feel they can be difficult. My M2 will be my 6th BMW since 2018. I have bought 2 from them and the rest elsewhere because of their attitude and attempts at price gouging.

[Tag]

They get a kickback if you finance through them which is why many will ask you up front if you plan on financing the car. If you say no, they know they won't make as much on the sale and will be less favorable in negotiating a deal. If you say yes but you have your own lender, they will try to strongarm you to finance through them.

General rule of thumb, when a dealer insists on anything; they're the winners and you're the loser. That said, you have the final say. Threaten to go elsewhere and then follow through when they won't budge. It's not a sellers' market anymore; the tables have turned. Buyers have all the leverage.

[techwhiz1]

I had a dealer give me a hard time because I told him I had outside financing and would not let him run my credit.

He claimed he had to to let me take the car. I told him I wasn't taking the car until the next day. The sales guy finally had the finance guy go away. They had my money in the morning andy sales guy ripped them a new one.

If I am bringing outside financing they only get DMV required information. They don't get info to store and sell.

[Carefree]

I pay with a certified check to avoid all the bullshit.

[luckylingy]

There's more to auto financing than meets the (consumer's) eye. If the consumer doesn't find her own financing, the dealership lends the buyer the funds to buy or lease the vehicle -- on the premise the captive or outside lender will 'buy' the deal from the dealership. The dealership hopes to be compensated, however nominally, for connecting the consumer with the lender (what's called finance reserve).

Not all lenders are as easy to do business with as others. There's whether the lender will agree to extend credit, then on what terms or with which stipulations. There's what documents they require to fund the deal with the dealership (and how those documents are transmitted). There's how quickly the deal is funded once documents are satisfactorily received by the lender. Then of course there's how much the dealership is compensated by the lending source for the deal.

What if the lender was very easy for the dealership to do business with, but precluded the dealership from making a profit from originating the financing? The dealership would have to find other ways of making money to pay its expenses.

On the other hand, what if the lender compensated the dealership well but offered uncompetitive rates, was difficult to do business with, and was slow to fund the financing? Most dealerships would rather a) preserve the deal with the consumer, b) avoid the administrative headaches, and c) get paid more quickly.

[robopp]

Originally Posted by Carefree

I pay with a certified check to avoid all the bullshit.

Why not just wire the money? Soooo much easier and usually a 30 minute delay for funds to clear. That’s how I bought my 911 and I’ll never do it any other way.

[Carefree]

Originally Posted by robopp

Why not just wire the money? Soooo much easier and usually a 30 minute delay for funds to clear. That’s how I bought my 911 and I’ll never do it any other way.

You’re right. Previously never crossed my mind. Either that or a suitcase of Washingtons.

[M_Power Rob]

Originally Posted by Carefree

You’re right. Previously never crossed my mind. Either that or a suitcase of Washingtons.

That would be a lot of Washingtons...better to bring a pocket full of Benjamins.

[JABCAT]

If they don't accept outside financing (i.e., Capital One) or don't match the rate & terms of the outside financing, I simply don't purchase from them, period. I don't negotiate, I don't haggle, I don't go back & forth with the sales guy or finance guy. I have everything ready before I set foot in a dealership. All that nonsense is a waste of my time.

The dealership from whom we purchased my wife's X3MC was another 5 min away from losing the sale because they were trying to jack around with financing. First they refused to send me the documents via Docusign (I was 4 hours away) claiming they were unable to do that per state regulations. That was bullshit because I had purchased other vehicles this way in the same state previously.

I said fine, my financing is secured with a preferred lender and the loan has already been sent to your finance department, here's the loan confirmation. Please have everything ready to go by the time I get there (4 hours). Got there, nothing was ready, Finance Manager I had dealt with was "gone for the day" and they couldn't find my file. Then they claimed I had to fill out a loan app in-person & get my signature in-person, which I knew was also bullshit. So I got up and walked out. Sales guy chased after me out into the parking lot & I told him he had 5 min to have the vehicle pulled around & the finance guy to have my already completed loan docs printed, placed in a folder, and placed on the front seat. Miraculously, he had that done in 5 min.

My wife had already told me to tell the guy to f-off, and for me to walk. I knew she really wanted the vehicle though, and there wasn't another like it for the price anywhere, so I put up with 55 min of BS more than I normally would. The sales guy then asks if I'll give him 10s on the survey and write a positive review I told him no, but I would called the Sales Manager the next morning to explain why I wouldn't purchase another vehicle from them. And guess what, I did not purchase my M2 from them.

[SpaceGhost]

Originally Posted by JABCAT

If they don't accept outside financing (i.e., Capital One) or don't match the rate & terms of the outside financing, I simply don't purchase from them, period. I don't negotiate, I don't haggle, I don't go back & forth with the sales guy or finance guy. I have everything ready before I set foot in a dealership. All that nonsense is a waste of my time.

The dealership from whom we purchased my wife's X3MC was another 5 min away from losing the sale because they were trying to jack around with financing. First they refused to send me the documents via Docusign (I was 4 hours away) claiming they were unable to do that per state regulations. That was bullshit because I had purchased other vehicles this way in the same state previously.

I said fine, my financing is secured with a preferred lender and the loan has already been sent to your finance department, here's the loan confirmation. Please have everything ready to go by the time I get there (4 hours). Got there, nothing was ready, Finance Manager I had dealt with was "gone for the day" and they couldn't find my file. Then they claimed I had to fill out a loan app in-person & get my signature in-person, which I knew was also bullshit. So I got up and walked out. Sales guy chased after me out into the parking lot & I told him he had 5 .....

Been down this road before....they will ruin years of sales to make a couple extra bucks today....

[wtb1313]

This is excellent. I’m assuming this is the same crew that discusses all these topics. It’s the super couponing sub group of Bimmer.

#1 takeaway is that this another variable to negotiate in the up front contract. I had never thought of it.

When you run the numbers I think it’s like $20-23 a month for $50k per 1% increase in the rate, so over 60 months $1500 more in total, but considering time value of money and the ability to pay it off early lets call it $1000 extra present value dollars.

Just food for thought. Since all the $1000 doesn’t go to the dealer there may something to negotiate in its place, parts or a maineance package could be a tradoff if you don’t want to lose a special order.

Pretty sure the margins can get bigger with lower credit scores so this may be a more profitable act for dealers long term then we are thinking.

Having bad credit is like chum for the corporate shark pool. Protect your kids.

[JABCAT]

Originally Posted by wtb1313

This is excellent. I’m assuming this is the same crew that discusses all these topics. It’s the super couponing sub group of bimmer...

Actually, I'd venture that the majority of BMW owners who can actually afford these vehicles (not spending 50% of their income on a car payment), make wise financial decisions. Those include not paying $1,500 more than they need to because they don't secure their financing prior to going to the dealer. And if you didn't know that dealerships pad interest rates & receive a kickback for financing, you probably don't fall into the above category of buyers. If one wants to pay an extra $1,500 in interest for a rapidly depreciating product, more power to them.

Contacting dealerships via email takes virtually no time, and very little effort. I haven't purchased a vehicle by going into a dealership and haggling with a sales associate in over 15 years & 20+ vehicles ago. All the information one needs is readily available.

[Ronin76]

Originally Posted by JABCAT

If they don't accept outside financing (i.e., Capital One) or don't match the rate & terms of the outside financing, I simply don't purchase from them, period. I don't negotiate, I don't haggle, I don't go back & forth with the sales guy or finance guy. I have everything ready before I set foot in a dealership. All that nonsense is a waste of my time.

The dealership from whom we purchased my wife's X3MC was another 5 min away from losing the sale because they were trying to jack around with financing. First they refused to send me the documents via Docusign (I was 4 hours away) claiming they were unable to do that per state regulations. That was bullshit because I had purchased other vehicles this way in the same state previously.

I said fine, my financing is secured with a preferred lender and the loan has already been sent to your finance department, here's the loan confirmation. Please have everything ready to go by the time I get there (4 hours). Got there, nothing was ready, Finance Manager I had dealt with was "gone for the day" and they couldn't find my file. Then they claimed I had to fill out a loan app in-person & get my signature in-person, which I knew was also bullshit. So I got up and walked out. Sales guy chased after me out into the parking lot & I told him he had 5 min to have the vehicle pulled around & the finance guy to have my already completed loan docs printed, placed in a folder, and placed on the front seat. Miraculously, he had that done in 5 min.

My wife had already told me to tell the guy to f-off, and for me to walk. I knew [...]

Yeah, I would have thought most would have had financing in place and approved from their institution of choice prior to walking into the dealership. I was planning on applying for financing through my credit union and then going to the dealership. Is that not what most do?

[DrewNewM2]

Originally Posted by SpaceGhost

Been down this road before....they will ruin years of sales to make a couple extra bucks today....

This exactly and why the auto buying experience is still like the worst of all types of buying experiences.

I was an early reservation holder for the 6th Gen Bronco when it came out and it was complete insanity with dealer mark ups $20k+. Dealers were taking peoples orders and selling them out from under them and many other shady dealer practices. Now there is so much overstock on Broncos, they’re sitting on the lots and a lot dealerships got bad reputations. The internet and social media makes it easy to really hurt the dealers that were being shady.

[c1pher]

Originally Posted by Carefree

You’re right. Previously never crossed my mind. Either that or a suitcase of Washingtons.

Everyone pays cash for their Porsches.

[c1pher]

Originally Posted by Ronin76

Yeah, I would have thought most would have had financing in place and approved from their institution of choice prior to walking into the dealership. I was planning on applying for financing through my credit union and then going to the dealership. Is that not what most do?

I’ve gone into dealerships truly without intending to buy on the spot or to look at a vehicle to sleep on it over the weekend and then work on financing. I usually know what my credit union rates are so if I give them my credit score they can usually tell me if they can do a competitive rate. I really don’t mind if they want to do the financing if the rate is good. I even say “hey if it helps you and the rate is good, I’m happy to structure it that way”. But telling me I don’t have a choice, especially when the rate sucks, is a quick way to have me leave.

[Carefree]

Originally Posted by c1pher

Everyone pays cash for their Porsches.

Good to know.
Thought I was one of only a few.

[DrewNewM2]

Pay cash if interest rates are high but when interest rates are low it makes sense to finance and keep your cash invested, even in high yield savings. I much prefer to hold on to my cash and double up on payments the first couple of years so I spend much less interest on the loan and make more with the cash I held on to. I will get the longest loan possible at the lowest rate with least amount down and pay it off in 24 months or so.

Paying cash is definitely an emotional thing rather than actual math. Some people don’t like to “owe” even if it benefits them.

[Carefree]

There is no “one size fits all” in an automobile purchase/finance decision or any large outlay for that matter.

Everyone’s situation including age, employment, investments, objectives, health, is different.

IMO