Sell Rate

The sell rate is the final interest rate that a consumer sees and agrees to when financing a vehicle through a dealership. It is based on the lender’s buy rate - the minimum rate provided to the dealer - but may include a markup that generates additional profit for the dealership.

For example, if the lender’s buy rate is 4%, the dealer might add a 2% markup and present the consumer with a 6% APR loan. This difference between buy rate and sell rate is not always disclosed, which can lead to consumers unknowingly paying more than necessary.

For dealerships, the sell rate is a key revenue stream, as they share in the extra interest income. For lenders, it ensures that loans remain profitable regardless of dealer practices.

For consumers, understanding sell rate is crucial because it highlights why pre-approval from banks or credit unions can be valuable - they allow borrowers to compare dealer offers against independent financing. Regulations require disclosure of the final APR but not the underlying buy rate, meaning consumers often lack visibility into the markup.

Borrowers with stronger credit should be particularly cautious, as they may qualify for lower rates but still be offered higher sell rates if unaware. Negotiating or asking dealers directly about buy rates can sometimes lead to reductions.

Ultimately, the sell rate represents both an opportunity and a risk: it provides flexibility in structuring deals but also underscores the importance of transparency in auto financing.