Arblease how it works

[Jonny69]

8 hours ago, ForestryFinance said:

I heard an interesting bit of info just last week from one of the lenders I deal with. They had seen the accounts for a fairly mainstream reputable motor dealer, and in one year they had made £13,000,000 profit. That amounted to a £14,000,000 gain in referral fees from finance companies, and a £1,000,000 loss in selling cars. 

I reckon that is similar in a lot of the motor trade - the finance companies give the dealer a 5% kickback, which is why they push you on to their finance. But who pays for that? The mug consumer who ends up on a deal that's costing 9.9% a year or sometimes more. Very grim in my opinion. 

Dealer margins on cars are terrible. If they had to sell cars with no finance or servicing they would all be bust in a week. 

 

It's the manufacturer that is taking all the profit from the sale of the new vehicle not the dealer. Which is why most manufacturers are self financing or PCPing in order to allow more people to be able to afford ever more expensive cars. On a side note how is a poverty spec Golf ever worth 25K or an Audi A6 nearly 50, its madness.

 

Also, sometimes they dealer has a stocking loan with a lender. If they don't put a certain amount of borrowing their way in a month or quarter then the rate goes up on the stocking loan. Always a handy question to ask if you want some cheap finance and they are short one month.