DDealer Reserve, commonly known as rate spread or participation. This dealer reserve is generated by the difference between the acquired rate from a lending source and the rate provided to a customer.
This difference provides additional profit to a dealer when providing financing to a customer. On average, this additional income will be larger than the profit made on the sale of the vehicle.
Customers will typically negotiate the sale price of a vehicle, their trade value and the down payment. Rarely will they object to the rate provided, assuming the negotiated payment they received was most important. The payment however, was derived from an arbitrary rate, loan amount and term.
Without knowing the best rate for which you qualify, the dealer will always present a rate that builds additional profit in the sale of their vehicles. The typical rate differential maintained by the dealer is one percentage point.
By example, a loan of $30,000 at 72 months with a one percentage point differential would provide an additional profit of $1008 to the dealer. Obviously, the larger loans will represent a greater profit to a dealer, while small loans will not be impacted as much.
Knowing the best rate for which you qualify would put that same $1008 back in your pocket on a monthly basis. This information and knowledge is available to you at our new website, Rateous.com.
Presenting yourself as a "payment buyer" places you into a weakened position. Always be informed. Know the best price, best trade value d always know the best rate you qualify for.
Negotiating with an auto dealer can be frustrating even when you're armed with as much information that's available. What's becomes more difficult is the method used by auto dealers to give you options called a " menu presentation". This presentation has multiple monthly payments with various yearly terms and down payments. Even the most seasoned negotiator can't be sure they are receiving their best deal with their best rate and best monthly payment. At Rateous, we will work on your behalf directly with a choice of auto dealers to insure you get the best deal you deserve regardless of you credit situation. Unlike many other web-sites, there is no fee for our service which makes your buying experience easy and enjoyable.