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https://www.bankrate.com/loans/auto-...inancing/#what

What dealer financing is and how it works

Dealer financing is typically considered a last resort by most experts. Dealers make money off in-house financing because they mark up your offered rate. For example, if you could qualify for a loan at 7 percent through a bank, you may receive an offer of 9 percent through dealership financing.

https://www.realcartips.com/carloans...inancing.shtml

How Much Money Do Dealers Make on Car Financing?

When you get a car loan financed through a dealership, they're not actually the ones loaning the money.
Dealerships work with several banks and they simply arrange the financing for you. Just like any service where there's a middleman, you can expect to pay some sort of commission.

Dealers make their commission through what is known as a finance reserve. This is an extra percentage added to your interest rate - usually 1 to 3%.

For example, a dealer may be able to get you financed at a 5% interest rate through one of their lending partners. This is called the "buy rate" - the rate at which the bank is willing to loan you the money.

The dealer will keep this figure hidden from you. What they will show you is the "sell rate", the interest rate that includes their commission. In this case, it may be 7%.

This 2% difference is where the dealer makes their money when they arrange the financing for you.