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13nick13

I'm a finance manager at a Chevy dealership. Do you have questions?

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To be clear... i'm not signing up to quote everyone 3 different scenarios on buying a truck. But if you have questions on financing, leasing vs. buying, rebates, need something double checked, or want your quote looked over for a second opinion, I would be more than happy to help  you. I have no expectations of gaining business from this, I just think I can help people so i'm offering the help. (i'm in Michigan though so if you want to buy a car here, i wont kick you out) I don't need to sit and debate about how crappy car dealerships are either. Basically if you are a nice person, with a legit question about something having to do with buying or leasing a new truck, or even a used truck... let me know. It may take a day to get back to you, but i'll do my best to help in any way I can. I want everyone to get the truck they want for a fair price. OH... AND I SAID "FAIR" I'M NOT PULLING INVOICES AND TELLING YOU HOW MUCH A DEALER OWNS A TRUCK FOR. I will tell you, however, if your pants are around your ankles. Fair car deals make happy customers and keep me in business. Let me know if I can help. 

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Posted (edited)

Originally, I asked the Finance Question that was in other thread, except I hadn't read that old thread and I saw it had blown up. I was going to delete, it, but as I did, OP responded.  

Edited by bwoodsmn
Clarity
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Posted (edited)

OK so... here is how that all works. PLEASE READ THE WHOLE THING.  I'm not trying to start a war. If you qualify for GM Financials A1 tier of credit, then the interest rate gm financial approves you at is 4.99%. Most people are paying 6.99% and being told they have to keep the loan 6 months. This is whats happening... The finance department makes profit by raising your rate from 4.99% to 6.99% IF the customer keeps the loan for a given amount of time. That period of time USED TO BE 3 months. What happened, was so many Chevy stores were marking up the 4.99% to 6.99% and TELLING their customers to refinance in 3 months because that was the cutoff for them to charge the dealership back. So GM Financial changed the rules and made it so the customer has to now keep the loan for 6 months OR the dealership will be charged back the $1,500 (or $1,000 whatever the rebate was) for the rebate we gave you. This can never be passed on to the customer. The dealership is the only one hurt when you refinance early. Not GM, not GM Financial. JUST THE DEALERSHIP. So anyone who got told if they refi too early, that they will be charged, got lied to. NOW BEFORE EVERYONE LOSES THEIR MINDS.... Try hard to remember that we all go to work to make money ok. And also REALLY READ the next part. So the rebate for financing with GM Financial has been either $1,000 or $1,500 depending on the truck. Lets look at a $1500 rebate. Say your decision is to either take a 3.75% interest rate at your credit union, or a 6.99% with gm financial with the extra rebate and they are telling you you have to refinance in 6 months. Ok, so if our truck is $50,000 and you finance for 72 months at 3.75% (figuring michigan 6% sales tax and all dealer fees) your payment would be $829.60/ month. Now we take the same $50,000, subtract the $1500 rebate, so now we are financing $48,500 for 72 months at 6.99%. Our payment is now $885.98. What that means is that every month you have the GM Financial loan, you are paying an extra $56.38/month. Multiply that by 6 months and you pay an extra $338.28 in interest. So if you are getting a $1500 rebate, you pay $338.28 back in extra interest, and you end up saving the remaining $1161.72. NO you don't SAVE $1500... but are you being RIPPED OFF? not really. I tell this full story to every single one of my customers who chooses the GM Financial rebates. Most places don't. I can't comment for them, but i will agree with anyone who says they should just give better interest rates rather than play games. I AGREE. But they don't. So if you want to save some cash off the bottom line, sure finance for 6 months and refinance at your credit union. If you don't want to hassle with it, just tell them you would rather use a credit union. The most you lose not taking the rebate is $1,100 to $1,200 at the end of the day. 

Edited by 13nick13
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PLEASE... DON'T REFINANCE DEALS EARLY IF YOU BOUGHT FROM A SMALL CHEVY STORE!!! The small stores are dying and being gobbled up by giant dealer groups. PLEASE just keep the loan 6 months. I stand nothing to gain by keeping money in other peoples pockets, but small dealers are getting their throats cut at every turn by giant dealerships who can take a loss on a truck to steal a deal from a mom and pops store, because they know they will make it up in bonuses from Chevy. If you were lied to and told that you could not refinance, or that you would face a penalty, that is NOT OK and I don't support that. But i do support dealerships who can save their customer money and tell them how to avoid excessive interest rates while still making sound business decisions. 

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OP, are you required to use GM Financial?  Seems to me that you could offer a better deal thru a more competitive lender.  For example, let's say you shopped around a 825 credit score to some of your banks (which might be a nice change of pace from the 500's and 600's out there, but that's another story for another time)  and the same lender that a buyer could finance thru directly at 3.9% would be happy to buy that same loan from you at 3.9%.  You'd then resell it at 4.9% -  or 5.25% - at least you'd make a point on the deal?  At 4.9%, that 50,000 loan would be ~802/72.  The 6.9% 48,500 loan now comes in at $824.55 - you'd still be able to show $22.00 in monthly value to your buyers without the rebate, and improve your loan attach rate at the same time.  Why would you not do that?

 

On a related note, how do you get paid (as an F&I guy, not the overreaching deal with backend funding) on the 0.0% rate loans?

 

 

 

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On 7/29/2019 at 9:04 PM, bwoodsmn said:

OP, are you required to use GM Financial?  Seems to me that you could offer a better deal thru a more competitive lender.  For example, let's say you shopped around a 825 credit score to some of your banks (which might be a nice change of pace from the 500's and 600's out there, but that's another story for another time)  and the same lender that a buyer could finance thru directly at 3.9% would be happy to buy that same loan from you at 3.9%.  You'd then resell it at 4.9% -  or 5.25% - at least you'd make a point on the deal?  At 4.9%, that 50,000 loan would be ~802/72.  The 6.9% 48,500 loan now comes in at $824.55 - you'd still be able to show $22.00 in monthly value to your buyers without the rebate, and improve your loan attach rate at the same time.  Why would you not do that?

 

On a related note, how do you get paid (as an F&I guy, not the overreaching deal with backend funding) on the 0.0% rate loans?

 

 

 

We just can't use the rebate if we don't go through GM financial, but you absolutely don't have to use it and go through them. We sign people up at credit unions way more often than we use GM Financial. A significant amount of credit unions don't allow dealerships to mark up their rates, but they pay the dealer a % of the amount financed. This is BY FAR the preferred way all around. My favorite credit union in the area has a 3.75 rate and pays me 2% of the financed amount. That works out great for everyone. The customer gets a good rate, and I can make a little money. 

 

On the second part about zero percent deals... The answer to that is, I DONT GET PAID TO DO 0% DEALS AT ALL. Zero percent deals and cash deals i do for 100% free. In fact, they only kill my per deal average. The thing that annoys me most is when people think we will give a discount for paying cash... Why would we do that when we would prefer you to finance? i realize people don't understand, so i'm only internally irritated. Just one of those things. Everyone has them at their job i'm sure. 

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