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So I'm trying to my wife a car and she finally picked the one she wants - and I wanted to lease it for her because I think that makes the most sense under the circumstances. She's easy on cars, doesn't drive a lot of miles, and she gets bored easily (so new car in 3 years).
Anyway, I have been working off of the published money factor from the manufacturer's finance company (which will be the leasing company) - but now the dealer is telling me that they add a point on top of the money factor so they make money too. When I said "you make money on the margin on the sales price, right?" He said "yeah, but there's also the back end, if the car comes off the lease and we can't sell it for enough, we lose money there so the point is to offset that."
I have researched it and apparently it's something they can do, but as a buyer, I'm calling shenanigans. Basically they're taking the equivalent of a 3.5% rate from the maker finance company and raising it to an equivalent of 5.9%.
I figure if they don't like the deal they're making or if they don't trust the residual value that the experts at their lending company are determining, then fine - don't sell me the car. But I'm not gonna pay the dealer another 2.4% to buy his risk of a bad deal.
Anybody familiar with this practice of dealer-added points on the money factor?
Anyway, I have been working off of the published money factor from the manufacturer's finance company (which will be the leasing company) - but now the dealer is telling me that they add a point on top of the money factor so they make money too. When I said "you make money on the margin on the sales price, right?" He said "yeah, but there's also the back end, if the car comes off the lease and we can't sell it for enough, we lose money there so the point is to offset that."
I have researched it and apparently it's something they can do, but as a buyer, I'm calling shenanigans. Basically they're taking the equivalent of a 3.5% rate from the maker finance company and raising it to an equivalent of 5.9%.
I figure if they don't like the deal they're making or if they don't trust the residual value that the experts at their lending company are determining, then fine - don't sell me the car. But I'm not gonna pay the dealer another 2.4% to buy his risk of a bad deal.
Anybody familiar with this practice of dealer-added points on the money factor?