This includes personnel, office space, computers, and other expenditures. To cover the costs of this retail infrastructure, dealers are entitled to a retail markup and like any other retailer, they are also entitled to make a profit. It is not valid to compare the rate a consumer gets from the dealership with the bank or finance company s buy rate. The appropriate comparison is the rate the consumer gets from the dealership versus what the same consumer could have gotten from a bank on their own. When judged by that standard, dealers not only provide very competitive rates, but also the convenience of one-stop shopping.
Customers can seek credit from a number of sources.
Given the intense competition from credit unions, banks and the Internet, dealerships must offer low rates and good service if they expect to earn a customer s financing business. In addition, only franchised dealers can offer special financing programs directly from the manufacturer. Dealerships provide a wide range of valuable services to assist consumers with vehicle financing. For example, dealership personnel shop various sources to secure a loan that meets the financial needs of the consumer. And because financial institutions generally provide funds to dealerships at a wholesale rate, dealerships can usually meet or beat rates from other sources.