Most people do not realize that car dealerships can mark up the finance rate for auto loans they secured financing for. Scary thing for you is they probably did. What does this mean? It means you are paying more money, each and every month, then you need to. Car dealerships can profit in the thousands and usually do. So the choice is yours...
1) You can do nothing and continue to overpay each and every month until your vehicle is paid off.
Or
2) You can take action today and start saving yourself some potentially big money each month.
"I'm confused. How does a car dealership profit from my auto loan?" You ask. Good question. Before I answer this, I'd like to say first off, that the customers that have their finance rate marked up the most typically fall in 550 to 660 credit score range. This is usually do to the fact that those customers do not have many options to finance a vehicle outside of using the car dealerships resources.
Here is how it works: For this example let's assume that you have a 625 credit score and you are at ABC Mega Car Dealership. You've found the vehicle you want and have completed a credit application. The Finance Manager at ABC Mega Car Dealership has submitted your application to three different lenders and has found the best rate available is through It's All About The Money Bank. It's All About The Money Bank has approved your auto loan at a 12% interest rate. Okay. Not too bad so far, but wait there is more. ABC Mega Car Dealership has decided they want to increase their overall profit on the deal and decides to sell you this interest rate at 14.5%. That can't be legal! It sure is! It's how banks incentivize car dealerships to send them more deals.
Using the example above, let's say that you were financing $25,000 over a 72 month loan. This 2.5% markup would equate to $2,431.44 in profit that will be split by ABC Mega Car Dealership and It's All About The Money Bank. A typical split is 75/25, meaning the car dealership would receive 75% of the $2,431.44 equalling $1,823.58 additional profit for the car dealership. Who pays the bill? You do!
If you are okay with that, then I'd suggest following option #1 from above and do nothing. If this is absolutely not okay for you, then you must follow option #2 and refinance your auto loan today. Most sources for refinancing are totally free and you will usually only pay a small $5-$65 title transfer fee to your states Motor Vehicle Division.
Where can you refinance?
1) A local Credit Union: Best for excellent credit. Typically not the best for Non-Prime or Sub-Prime credit.
2) A local Bank: Typically not the most competitive rates and terms.
3) Some Car Dealerships: Can you trust them? If this article applies to you, then they are the reason you are looking to refinance.
4) Online Source: Offers the broadest spectrum of terms and rates. Easy and very competitive. Programs for most all levels of credit.
Take advantage of auto loan refinancing today, or else you'll be kicking yourself the next time you write that over inflated check to the bank for your vehicle payment.
To apply for your auto loan refinance visit http://www.EZAutoLoanRefinance.com Refinancing is Free, Fast and Easy. Stop overpaying and apply today! Justin has assisted thousands of customers with auto loan financing to purchase vehicles and now has partnered with one of the nations largest auto loan refinance sources available. With over 45,000 refinances and average customer savings over $60 a month, that's over $4,320 saved over the course of a 72 month loan, it's easy to see why they are tops in their field. http://www.insidercarbuyingtips.com
