[Deegee]

Originally Posted by pylon

Car dealers don't want you to pay cash, big myth. We make money on the financing through an interest rate reserve, and it opens up products on the loan not available on a cash sale. Specifically life and disability insurance, also it makes the sale of add-ons much easier because they now become a monthly instalment, not an upfront cost. In fact many dealers will give you a BETTER deal knowing you will finance, as they can bank on some back end profit. You usually see a financed customer again, and they are easier to retain, I believe the re-visit rate is something like 70%. Where as 80% of cash customers you never see again, so unless you are trying to unload overstocks or distressed inventory, you may be better to just let them walk.

Do dealerships have any clawback clauses with dealer plan reserves? Like if the loan is paid out at 90 days -- No reserve is paid to the dealership?