Nissan Enabling Bigger Dealer Markups On 7-Year Loans

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As CarsDirect’s resident pricing expert, Alex offers must-know analyses of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured by The Wall Street Journal, Fox Business, Motor Trend, Automobile Magazine, and more.

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, Managing Editor - June 15, 2022
2022 Nissan Sentra sedan

Nissan is allowing dealers to impose larger markups on its longest loans. According to incentive bulletins sent to dealers, Nissan Motor Acceptance Company, or NMAC, is enabling dealers to mark-up 84-month loans by as much as 1.5%. The changes may enable dealers to profit more from payment-focused car buyers.

Starting today, NMAC is allowing dealers to mark-up its standard rates by up to 150 basis points. This may translate to a price increase for buyers compared to the previous limit of 100 basis points by raising the allowed markup from 1% to 1.5%. While car buyers know this as a markup, automakers call it Dealer Participation.

Non-promotional financing offers, or standard rates, have become more prevalent from Nissan amid a broader pullback of incentives due to an inventory shortage. Currently, the brand's best rates are limited to just 36 months, and just about every new Nissan only offers standard rates on loans over 48 months in length.

2022 Nissan Frontier truck

Based on the NMAC's standard rate bulletin that went into effect today, the company's 84-month rate is now 4.35% APR. With a 1.5% markup, that would come out to 5.85%. On a 7-year loan for a $30,000 car, a rate of 5.85% would cost over $6,600 in interest assuming you can avoid a price markup or unwanted add-ons.

To make matters worse, these examples are based on top-tier credit. With so-called Tier 2 credit, the rate would jump to 7.26% after the markup. With Tier 6 credit — the lowest allowed by NMAC with 84-month financing — the rate would be 11.45%. The same rates apply for both new and factory-certified used Nissans.

Having said all of that, Nissan's 84-month financing rates can still be lower than competitors. For example, Ford's 84-month rate on a 2022 Bronco Sport crossover or Maverick pickup is currently 7.9% APR with top-tier credit. There can be exceptions. The best 84-month interest rate on the 2022 Ford Edge is just 3.9%.

Although 84-month financing can create lower car payments, they're not for everyone since they involve higher rates and could expose consumers to the risks of negative equity. Still, more brands are promoting longer loans. For example, Ford recently began preselecting 84-month loans in online payment estimates.

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, Managing Editor

As CarsDirect’s resident pricing expert, Alex offers must-know analyses of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured by The Wall Street Journal, Fox Business, Motor Trend, Automobile Magazine, and more.

Follow On: Twitter

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