Auto loans for purchases are not quoted in money factors. Sales person is just trying to slip one past you.
Iām sorry for being so confused, but this is a lease not a purchase.
I hope I understand right when you say āpurchaseā
Exactly. Your confused because the sales person was lying. He/she could not have mixed up his/her quotes because money factors are only used on leases, not purchases.
This is what Iām talking about.
The salesperson told you that .00184 is what theyāre charging you for a lease and that .00084 is only for a purchase/financing. Purchasing/financing doesnāt use MF, so to tell you that the MF is only for purchasing/financing is a nonsensical statement. You either misunderstood them or they were lying to your face.
Oh I know they were lying to my face thatās why I am not going back there anymore.
But thank you for pointing that out.
Now I know what to look for.
In general, I only pay attention when the MF has three zeroes after the decimal point. Two zeroes only if they are offset by heavy incentives/discounts and high residual.
I got a quote from a local dealership that advertises up front pricing. However after asking for their lease numbers their money factor was 0.00158 vs the 0.00058 that I got from Edmonds. Do I just go back to them and call BS or is it standard for dealerships to mark up money factor and itās something that I am supposed to negotiate.
Call out their bs Iād say, they try to profit off of the deal by marking up MF
Thatās what happened to me.
Make sure to ask for RV and MF before the quote
Itās the first thing I asked before even letting them talk. To go find out the MF for a specific car and see if it matches what edmunds had.
I might be wrong though, but it helped me a lot. The true hackers would have to confirm though.
I donāt understand why so many folks get so worked up over a marked up MF.
The MF is just another lever the dealer can pull to make more or less $$ on a deal, no different than the discount.
There is absolutely nothing wrong with a marked up MF as long as the dealer can offer a greater discount to offset it.
As a buyer, I couldnāt care less whether a dealerās accounting department wants to show more profit in sales or finance, as long as the overall deal is good.
While I agree with you, I think their is two components to this. Many people do not realize itās one of the levers a dealer can pull to make money / profit on a deal.
The second being that people seemed to be conditioned that because they have as one recent poster said āsuper elite creditā or another mentioned āgod like creditā, that they are entitled to a base rate mf deal where as it only makes you eligible for a base rate deal.
If you are looking for a deal at base rate mf then indicate that up front in the process. As Jeff and many other LHāers recommend, you need to look at a deal holistically to determine if a marked up MF is offset by a larger discount.
Thereās one reason a buyer should care: It could affect the comp of the person you are dealing with. It might actually be in the buyerās benefit to work with a manager who gives a larger discount with the higher MF
Or if you are leasing to immediately purchase (bc lease incentives are higher than purchase incentives). You want the mf marked to the max in exchange for a larger discount. As others have pointed out you just need to understand how a lease works and how the levers interact.
Genuine question b/c Iām still learning: how so?
Like a bonus for selling x number of vehicles, some also get a bonus for leasing x number with a marked up mf. They may be willing to forgo commission in one area if it means hitting that bonus.
If I am shopping around, does the MF stick with my zip code or the zip code of teh dealership? For example, if I drive out of state do I get that states money factor?
They generally arenāt different (incentives tend to be more regional), but which program apply depends on the bank.
In addition to what Matt said, finance managers are often (usually?) compensated based on F&I revenue rather than gross profit on the sale of the car.
The same monthly payment can be structured to have more of the former than the latter, and consumers might find less resistance to achieving their goals this way
.00001 is the best MF
Manufacturer releases those numbers monthly. You can get them from Edmunds. Just provide them what model/trim you are interested in, the term like 36/10k, your Zip code and they will give you the MF, RV and any manufacturer discounts and incentives that applies to your region. The link below is just an example for 2021 BMW 3 Series. Good luck!
https://forums.edmunds.com/discussion/61341/bmw/3-series/2021-bmw-3-series-lease-deals-and-prices#latest
Yup! I have seen that on Toyota leasesā¦they really donāt need to make any money on leases I see.