Need thoughts

[Jameg1011]

Originally Posted by Evergreen6

My background is in business and finance. Your perspective of working for a dealership is different from the perspective of sound personal finance with the goal of saving one's hard earned money.

So your background is in finance and you know for a fact that you can get a rate lower than 1.9 on a conventional auto loan? Not to mention you seem to think that 2.5 is way out of line... this makes me worry. I see everyone's credit who rolls through the dealership and I see every buy rate that we get from about 14 different banks on most every deal. We can mark the rate up to 2% but honestly we usually don't here. Most dealers mark up every deal 2% which is the max allowed by law in my state which would put your buy rate assuming you got a 1.9 at -.1%. Now what bank is going to loan you money that they'll pay you on? Not to be rude, but I just can not follow your logic. Not to mention if your background is in finance and you don't think you can net your investors more than 1.9% ROI, then maybe finance isn't the profession for you :P.

What people don't understand is that a lot of the sub-vented rates (or buydown rates) arn't true rates. Yes, as far as you see on paper you're paying 0 interest, but I guarantee the company is just getting the money upfront in another form. (in lue of rebates ect) Notice those programs are usually offered by the manufactures financial arm (bank), meaning they are gaining a sale of a vehicle. Which trust me they are making there money upfront on the sale to be able to put on paper that your paying nothing in interest to make you feel warm and fuzzy because they already have your money. :P. Don't keep sipping the cool-aid!

Like I've always been told, people arn't in business to loose money, and why should they be! We all pay tons of markup on everyday goods and I don't see anyone yapping about that here online. Just some food for thought on the issue, your groceries have about a 40-60% markup. In a single year say you spend $6,000 a year for a family of 3 on food. You're paying roughly $3,000 on an average to the grocery store for profit, is that more wrong than a bank loaning you 50k for 6 years at 2.9 making $ 4,536.33 over the 6 years. Or better yet, people argue with me at the dealership over $100 on a 70k vehicle... in the end, is it really worth the aggravation on both sides? In my opinion its really not.

On a more broad note within the finance sector, rates in general on everything will be rising soon. If not, this country is in big trouble. (and yes, I mean car loan and housing rates along with the good raises in ROI on savings accounts and bonds ect.) The rates that we have been seeing over the last few years are a strong sign of a stagnate economy, and are not health for economic growth across the board.