Nissan dealerships cash out 7-year loans with an APR mark-up

Dealerships asking for MSRP have caused outrage and frustration among car buyers, but that’s not the only way sellers can squeeze out the pips of people already struggling with the higher cost of living. Some of them also earn extra on financing your car.

Starting this week, Nissan’s finance arm is allowing its dealers to mark up its longest loans. According CarsDirectNissan Motor Acceptance Company (NAMC) has issued a bulletin to its dealers allowing them to mark up auto loans up to 1.5% over 84 months, which could cost the buyer thousands of dollars over any the term of the loan.

CarsDirect reports that Nissan’s most attractive rates are already only available on shorter loan terms as the company grapples with a shortage of inventory. Loans over 48 months are only available with standard rates, but with many drivers feeling the pinch due to the rising cost of fuel, food and household bills, many are tempted to take out loans with longer financing terms, including 84-month loans to lower their monthly payments.

Related: 84-Month Auto Loans Become More Popular As Automakers Want To Keep Prices High

With Nissan’s new 1.5% markup, the standard 84-month rate for buyers with prime credit is 5.85%, the report said. But it’s likely that many of those buyers who need longer loans don’t have top-notch credit, and that’s where it gets ugly. The 84-month rate drops to 7.26% for those with Tier 2 credit after the new boost, and if your finances are really in the hole and you only have Tier 6 credit, you might consider a terrifying rate of 11.45%.

However, as the report indicates, prices can vary from brand to brand, and even between models of the same brand. So, despite Nissan’s poor profit margin, you could still pay less for your car than another automaker’s. According to the same report, even a customer with prime credit looking for an 84-month loan on a 2022 Ford Bronco Sport will be stuck with a 7.9% rate, although change your affections for an Edge, that the automaker likely finds more difficult to move, and the rate drops to 3.9%.

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