Cheat Sheet Calculator - Dealer's Buy Rate

To calculate the dealer’s "Back-End" profit that is made from financing or leasing, the customer must know the dealer’s Buy-Rate. As mentioned in the previous chapter (Dealer Visit), the buy-rate is the dealer's cost on the loan's interest rate or lease contract’s Money-Factor.

 

Remember, the buy-rate is the dealer’s proprietary information. In other words, it is not published on the Internet. Also, the buy-rate may change from dealer to dealer, depending on the volume loans or leases they contract with each lender.

 

For example, a dealer that “writes” one hundred loans a month with US Bank may receive a better buy-rate than a dealer that only writes ten loans with US Bank.

 

During the customer’s first dealer visit, they should have requested the buy-rate from the F&I manager or salesman.

 

The example below illustrates how to enter the interest rate and buy-rate into the “Cheat Sheet".

 

If leasing, the example below illustrates how to enter the money-factor and buy-rate into the “Leasing Cheat Sheet.”