Nissan Enabling Bigger Dealer Markups On 7-Year Loans

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.

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.