Bank PO = Discount from Dealer

**shadrach** · March 16th, 2010 07:09 AM

I signed my loan docs yesterday for a Honda Jazz 1.5. What's interesting is that the amount to be paid to the dealer is about 40,000 pesos lower than my loan amount.

Although SA's have always denied that banks get a discount, Now I'm sure that the banks do not pay the same amount as a cash customer.

Too bad, the dealer do not pass that kind of discounts when a customer is paying straight out cash.

**shadrach** · March 16th, 2010 07:11 AM

To add...

WOW...the bank is really making a lot of money on this one transaction..

Interest, chattel mortgage and dealer discount....Just amazing!

**Horsepower** · March 16th, 2010 09:38 AM

Banks need to make money whenever there's an opportunity. That's the nature of its business.

**shadrach** · March 16th, 2010 09:52 AM

Not against profit per se...but its seems to be double dipping for the bank and a little dishonest for the dealer.

The discount should be transferred to the buyer and it should be fully disclosed.

**kishAn** · March 16th, 2010 10:29 AM

sir where did you apply your loan. directly from the bank?or from the dealer? in the first place you shouldn't signed the promissory note. the bank will never know if the unit you want to buy has a cash discount, if you personally know it you should have told it so that the bank can give you option to wether apply your cash discount to your down payment or to the unit price.

di naman siguro dudungisan ng banko ang pangalan nila just to get additional income.

**shadrach** · March 16th, 2010 12:23 PM

Originally Posted by kishAn

sir where did you apply your loan. directly from the bank?or from the dealer? in the first place you shouldn't signed the promissory note. the bank will never know if the unit you want to buy has a cash discount, if you personally know it you should have told it so that the bank can give you option to wether apply your cash discount to your down payment or to the unit price.

di naman siguro dudungisan ng banko ang pangalan nila just to get additional income.

I guess I wasn't clear.

I applied direct with my bank. Got a good rate of 29% for 60 months.

I then found a honda dealer who had a unit allocated.

I signed the docs yesterday and expect the car today.

During negotiations with the dealer, I asked if there are any discounts on the Jazz..and of course, they said no, honda never discounts. I asked since I handled my own financing, is there a discount a la cash buyer...again the answer was no.

So yesterday, when signing the docs, one of the sections spelled out how much the check BPI was cutting to the dealer minus my downpayment. And again, the difference was 40k pesos.

I had always suspected that the bank receives a fleet discount on anything they buy but this is not disclosed and even the dealer hides this fact.

I'm just saying from a consumer standpoint, this is bordering on fraudulent since the loan amount I am signing up for is not what the bank is paying the dealer with. They already made money on the interest charges and chattel. I guess they also make a profit on the actual cash transaction between them and the dealer.

**shadrach** · March 16th, 2010 02:09 PM

Originally Posted by ayumi03

hmm..hw did that happened sir?
from which bank did you applied your car loan financing?

BPI is the bank..what do you mean how did it happen? I'm sure this practice has been going on for quite some time now. I just found proof of it finally.

Think about it, a bank like BPI handle's thousands of car transactions like this yearly. I'm sure the discount they get is part of the an industrywide practice. I was just thinking such discounts should be passed on to the buyer since the car price negotiation is between the buyer and dealer.

**_Qwerty_** · March 16th, 2010 02:11 PM

from Honda's point of view.. why would they give BPI a discount? what would they get from that?

**uls** · March 16th, 2010 03:06 PM

doesnt make sense

why would honda give the bank a discount?

the bank actually has to give honda a dealer's incentive

**uls** · March 16th, 2010 03:39 PM

if i was honda (or any other car dealer) and i had to give banks big discount, then that would discourge me from selling cars to customers who will go thru bank financing

i'd prefer cash buyers nalang who i don't have to give big discount to

but car dealers prefer customers who buy cars thru bank financing coz they get a dealer's incentive for every car sold thru bank financing

banks give dealer's incentive to encourage dealers to refer more customers (borrowers) to them

win-win

the story above doesnt make sense