Denver Morford doesn't charge for arranging customers' financing.
When Morford's customers receive loan approval, he gives them the lender's wholesale rate, also known as the buy rate.
Morford, dealer principal at Barry Chrysler-Dodge-Jeep-Ram in Eph-rata, Wash., says he doesn't believe in dealer reserve, the percentage of interest a dealership is allowed to add to an auto loan as a fee for arranging the loan.
The rejection of dealer reserve is "a value-add to our business," Morford says.
After he tells each customer the buy rate, he explains that he has the legal right to mark up the interest rate for compensation, which most dealers practice, but he chooses not to. The average dealer reserve in his region is about 2 percentage points, or 200 basis points, he says.
Morford wants his customers to understand and be a part of what happens behind the scenes during financing.