# Vendor Pricing

Canonical URL: https://fundmyequipment.com/learn/glossary/vendor-pricing/
Last modified: 2026-05-29T19:39:17+00:00
Type: efin_glossary

## Summary

Invoice price from equipment dealer or manufacturer.

## Content

Vendor pricing refers to special pricing or financing terms that an equipment dealer or vendor has pre-negotiated with one or more finance companies. The vendor can offer customers financing through that lender with terms (rate, fees, approval likelihood) that may differ from the lender's standard programs.
How vendor pricing works

Equipment dealer establishes a relationship with one or more lenders
Dealer and lender pre-negotiate program terms (rate buckets, fees, approval-criteria sweeteners)
Dealer offers customers financing through that lender at the negotiated terms
Dealer earns a referral fee or sub-vention payment from the lender on funded deals

Vendor pricing variations

Promotional rates: 0% APR or below-market rates on specific equipment, often subsidized by the manufacturer or vendor
Volume-discounted programs: the vendor's deal volume gets them better rate buckets from the lender
Sub-vention: the manufacturer or vendor "buys down" the customer's interest rate by paying the lender directly
Special-approval programs: the lender allows slightly more flexible underwriting for the vendor's deals (because the vendor pre-screens or stands behind certain risk)

For buyers: vendor pricing pros and cons
Pros:

Sometimes lower rates than going direct to the lender
Faster approval (the vendor knows the lender's underwriting box)
Integrated experience (sign equipment and financing in one closing)
Manufacturer promotional financing may be very competitive

Cons:

The dealer is incentivized to use this lender, even if a different lender would give you a better deal
Promotional rates often have conditions (specific equipment models, strong credit only, larger down payment)
Vendor financing may have origination fees or doc fees that aren't obvious until closing

What to do

Get the vendor's financing quote with full terms
Get the cash price separately (sometimes "promotional financing" has built-in price markup)
Get an independent quote from a broker or direct lender
Compare total cost of ownership, not just rates
Choose the lower total cost