But dealers aren't legally required to tell you this rate and many don't because they only get a small fee for arranging loans at the buy rate. They can make a lot more money if they get customers to pay a higher rate. And the lenders encourage that because they usually split the extra income. They call it back-end money. Scott Satcikowski, now a law student and clerk for a consumer law firm, says he left his job as a finance manager at an Ohio car dealership because he felt what he was doing was unethical.
People think the dealership makes the profit on the front end, on the price of the car.
But they make as much as, if not more, on the back end. It's something that consumers do not know about. They think that the rate they're getting is what the bank gave them. And telling them otherwise is untrue. It's not right.