That's a good one. It depends, mostly on the customer's credit. If the customer has excellent (over 710) credit, they are about the same. If they have lower than 710, it's all about how much "bump" can be put into the rate.

As far as the salesman is concerned, it doesn't matter. Salesmen are usually paid on "front end" gross, which is basically selling price - invoice + incentives. All finance products are considered "back end" gross, and that's what the F&I managers are paid on.

Many people assume the dealer only makes money on financing or leasing if they "bump" the interest rate (that is, charge the customer a higher rate than the current "buy" rate). That's not the case. Even on subsidized loans or buy rates, there is a profit for the dealer.

One thing that is definitely NOT the best for the dealer, is paying cash. It boggles my mind when people come in and ask if they get a discount for paying cash. No, you don't. We're already making less money on you, that would be stupid.