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I have multiple years of experience in auto sales and I’m not familiar at all with lender fees ‘baked in’ to the price. Moreover, state laws required all costs

I have multiple years of experience in auto sales and I’m not familiar at all with lender fees ‘baked in’ to the price. Moreover, state laws required all costs to be broken out in the contract, there was no legal way to attempt to hide additional costs. I’ve personally watched many customers do exactly what you were contesting - take a loan, then pay it off early without penalty. Most lender had a 3-6 month wait on that, so they needed to make a few payments before paying it off in a lump sum.

beerandt 5y ago
>not familiar at all with lender fees ‘baked in’ to the price. Not cars, but a family member sells high end mowers. They offer 0% financing, knowing that they directly pay the lender $400 per loan to be able to offer that (varies with loan amount, but not much). They just price everything $400 higher when running that deal (their internal minimum recoup sale price, not necessarily the sticker or displayed discount price). >there was no legal way to attempt to hide additional costs. It's not hiding an "additional" cost, it just means the sale price or financing rate takes into account the dealers/ lenders cost to finance. It also has to do with whether the rate offered is APY or APR, and how those are used somewhat interchangeably to hide fees as included in the offered APR (so it's truthful, but basically based on a best-case payback scenario, and effectively higher if you prepay, even if there are no "penalties"). >Most lender had a 3-6 month wait on that, so they needed to make a few payments before paying it off in a lump sum. Yes, this is almost universal now, including provisions that restrict the title transfer for some minimum period (was 6 months in our last car, but they said some are for 12 or even 24 months). Basically they don't have to remove the lien until then, even if you pay off the note. So if you pay early, you are effectively penalized the annuitized cost between the payback date and when you are actually free to sell the vehicle to recoup that payoff amount.
- sonotathrowaway 5y ago
  I never sold lawn mowers, I sold automobiles at a ounce shed dealership for a major automobile brand. There was never, at any point, with more than a dozen lenders, any type of fee associated with taking a loan. We did not offer lower prices for customers paying cash, it was the opposite in fact. We never paid a bank for giving a loan either. None of the things you keep proposing have any semblance to my professional experience.

beerandt 5y ago

>not familiar at all with lender fees ‘baked in’ to the price. Not cars, but a family member sells high end mowers. They offer 0% financing, knowing that they directly pay the lender $400 per loan to be able to offer that (varies with loan amount, but not much). They just price everything $400 higher when running that deal (their internal minimum recoup sale price, not necessarily the sticker or displayed discount price). >there was no legal way to attempt to hide additional costs. It's not hiding an "additional" cost, it just means the sale price or financing rate takes into account the dealers/ lenders cost to finance. It also has to do with whether the rate offered is APY or APR, and how those are used somewhat interchangeably to hide fees as included in the offered APR (so it's truthful, but basically based on a best-case payback scenario, and effectively higher if you prepay, even if there are no "penalties"). >Most lender had a 3-6 month wait on that, so they needed to make a few payments before paying it off in a lump sum. Yes, this is almost universal now, including provisions that restrict the title transfer for some minimum period (was 6 months in our last car, but they said some are for 12 or even 24 months). Basically they don't have to remove the lien until then, even if you pay off the note. So if you pay early, you are effectively penalized the annuitized cost between the payback date and when you are actually free to sell the vehicle to recoup that payoff amount.

sonotathrowaway 5y ago
I never sold lawn mowers, I sold automobiles at a ounce shed dealership for a major automobile brand. There was never, at any point, with more than a dozen lenders, any type of fee associated with taking a loan. We did not offer lower prices for customers paying cash, it was the opposite in fact. We never paid a bank for giving a loan either. None of the things you keep proposing have any semblance to my professional experience.