Bank PO = Discount from Dealer

[uls]

That is so not true...dealers prefer people who buy cars with financing arranged by the dealer and not direct thru the bank. That's why you always see threads here in tsikot of in demand models and the first ones in line are those who are financing thru the dealer.

Cash buyers don't bring anything extra to the dealer's profit margins.

you should have quoted my whole point

the last thing banks wanna do is discourage car dealers from doing business with them

if banks force car dealers to cut prices as a condition for doing business with them, that's a disincentive

car dealers would then prefer to deal with cash buyers instead

i know car dealers prefer customers who buy cars thru financing coz they get dealer's incentive

this is what i said in an earlier post:

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

my point is banks encourage dealers to do business with them

if, as you say, banks demand dealers to give them huge discount coz they're banks, that sounds like a disincentive for dealers to do business with them

if a dealer has little incentive to do business with banks, then what's the point?

if it's no different than selling to cash buyers, then dealers would rather sell to cash buyers nalang coz it is less hassle

i'm looking at things from the dealers' POV

[uls]

I think its you who is misunderstanding how things work in the car selling business.

i don't sell cars but i have experience being on the dealer's side of bank financing transactions

we sell heavy machinery

our customers are a mix of cash buyers and those who go thru financing (just like in the car business)

most of our financing customers go to Orix Metro (Metrobank)

even if we didnt refer the customers to Orix, Orix gives us dealer's incentive

for us, the dealer's incentive serves 2 purposes

first, it compensates us for the hassle of having to deal with a bank (additional paperwork and stuff)

2nd, it encourages us to refer other customers to Orix

Orix never asked us for discount

--

the thing that encourages us to do business with a bank is the dealer's incentive

that makes buyers who go thru financing a bit more preferable than cash buyers

if the bank forces us to give them (or their customer) a big discount, that screws up the whole thing

we would have to go thru the hassle of dealing with a bank, tapos babawasan pa nila kita namin

that would be very discouraging

[autophile]

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.

I'm guessing that you got your car from Honda Cars Makati Inc? HCMI (dealer network consists of Makati, Alabang, Shaw, Pasig, Global City) is a member of the Ayala Group of Companies. It could be that the discount given to BPI is part of the cross-selling between sister companies, since BPI is also owned by Ayala.

[boybi]

Magulo yata yan a. Banks give dealers incentives, tapos magbibigay ng discount ang dealer sa bank??? Para silang nag gagaguhan nyan.

[uls]

Magulo yata yan a. Banks give dealers incentives, tapos magbibigay ng discount ang dealer sa bank??? Para silang nag gagaguhan nyan.

exactly my point

sir boybi, malabo ba ako mag explain?

o di lang nila ako magets?

[boybi]

exactly my point

sir boybi, malabo ba ako mag explain?

o di lang nila ako magets?

No. Same lang tayo ng thoughts on this matter.

Ang nakapagpagulo lang naman dito is yung nakita ni TS na lower amount na ibabayad ng bank nya sa dealer. Maybe tama si autophile na Ayala dealer yung pinagbilhan ni TS and may certain arrangement ang mga dealers with BPI since same owner naman sila.

[mark_t]

Let's wait for the posting of the documents so we will know
exactly the facts.

[shadrach]

you should have quoted my whole point


if a dealer has little incentive to do business with banks, then what's the point?

if it's no different than selling to cash buyers, then dealers would rather sell to cash buyers nalang coz it is less hassle

The point being is that the bank has all the leverage in the transaction since without bank financing, the usual buyer would not be able to buy the car. Trying to get a little extra more profit for the bank in the form of a
fleet pricing scheme would be the norm.

You the dealer, would have to play nice with banks since without them, the car selling business would grind into a halt as it did in the US in mid-2008 to 2009 during the credit crunch.

My observation of the local market here is that Auto companies are also more reliant on loans to propel sales and that the new cash buyer is few and far between.

During my negotiations with the dealer, many have intimated that if my company bought a fleet (more than 1) car at the same time, then I would get a discount. Why would not banks have the same kind of deal?

BTW, the deal is between BPI and a non-Ayala provincial dealer.

Like I said, I will post the docs once I get it back.

[boybi]

It's simple, if banks really get discounts from car dealers, people would have known it a long time ago already. Bank managers would have passed on the discount to their valued clients, and these clients would have told someone that they got a huge discount from their banks.

FYI, bank managers would do things just to keep their most valued clients happy and stay with their bank.

[shadrach]

It's simple, if banks really get discounts from car dealers, people would have known it a long time ago already. Bank managers would have passed on the discount to their valued clients, and these clients would have told someone that they got a huge discount from their banks.

FYI, bank managers would do things just to keep their most valued clients happy and stay with their bank.

Actually, bank managers are not part of the equation. They get points for referring clients but they are not part of the deal. The points are for their performance reviews.