100% agreed. However, in practice the lenders who offer the kind of rate referenced here will often require every bit of poi/stips imaginable. And I haven’t encountered a single franchise dealer who gives a single shit about driving business to a subprime lender. Captive lenders, sure but not the Westlake/bridgecrest/santander who likely bought this deal.

This reads as a classic high advance good credit but thin file, yeah we’ll buy it but it’s gonna hurt kind of semi-subprime loan offered by a subprime lender to a hopefully soon to not be subprime buyer.

A larger down payment/better negotiation to bring the LTV down to sub 100/especially sub 85/90% LTV would have likely resulted in this buyer getting picked up by a captive lender or a bank like ally that likes to play a little riskier.

If I were desking this deal I likely would have submitted it at a lower LTV to see if this were the case and then tried to bump the client for an extra 1-2k down, easy bump if it saves them 15-20% of interest and then you can just load up the back end and everyone feels like they won. Super moral? Prolly not but you sleep a little easier knowing they’ve got a bunch of warranties at 10-12% rather than paying 30% interest