Brian Peruggi, general manager of Mini of Warwick, in Rhode Island, is a fan of the program, which he joined five months ago. As long as customers qualify, they are treated more fairly, regardless of their credit history, Peruggi said.
"They totally changed the way the structure works so the dealers are still profitable in the F&I department," Peruggi said. "It's a win-win. It creates transparency. You go online — the rate's 4 percent. You come in the store — it's 4 percent."
The set rates will adjust periodically as market rates fluctuate, Smith said. Customers are free to shop around if they can find lower interest rates elsewhere. Smith said he believes the transparency of the program will drive interest in the brand.
Though financing is at a set rate for all customers, it doesn't mean Mini will take on more risk. The program allows dealerships to structure deals that fit the customer's credit profile. For example, if a customer qualifies for the set rate but has a higher risk of default, the captive finance company may approve them for a smaller loan amount at that rate, which would require them to make a larger down payment.
A marketing campaign for the set rate program will launch soon, executives said. There are no current plans to expand the program to other brands under the BMW Group banner.