Hidden Auto Finance Charges

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Hidden Auto Finance Charges Cost Americans As Much As One Billion Dollars Annually

“Hidden Auto Finance kickbacks typically add at least $1000 to the cost of an auto loan…” -- Stephen Brobeck, Consumer Federation of America American car buyers are being charged at least hundreds of millions, and as much as a billion dollars annually, in undisclosed “finance mark up charges” when they finance their cars at automobile dealerships, concludes a report by the Consumer Federation of America (CFA)* Consumers who think they are being charged an interest rate based on their creditworthiness are, in fact, often charged a rate determined by the dealer and encouraged by the lender. Most of these undisclosed mark ups are kicked back to the dealer by the lender, with the lender keeping the rest. According to several studies, these mark ups have affected about one in four consumers who get car loans through dealers. In some cases, consumers have paid more than $5000 in these charges over the life of the loan.

     At least

    -1 in 4 GMAC transactions

     -1 in 4 Ford Motor Credit

     -1 in 2 Nissan Motors Acceptance Corp. were assessed the mark up.

     While these mark ups have affected car buyers of all races, African Americans and Hispanics (especially Hispanics with excellent credit) have been particularly hard hit.

     Check with your bank or credit union about financing before you start visiting dealerships. Above all, read the fine print!

*Read the full report, The Hidden Markup of Auto Loans at Consumer Federation web site