Study Finds African Americans Three Times more Likely to be Charged Markups on Car Loans

[tnitsuj]

From the Washingtonpost.com


This is the best part:

"The biggest difference was in Wisconsin, where blacks paid five times as much as whites in loan markups."


I didn't know they even had black people in Wisconsin.

 

[CADsortaGUY]

Heh - Well, I'm pretty sure "blacks" weren't the only people that Finance offices screwed(I'm sure in Wausau,WI - there were plenty of laotians who got "taken" on the back end - I know that for a FACT) They screwed anyone they could. Dealership make tons of money on the back side - this is nothing new. To claim that it is a racial thing is absurd as the Banks set the rates based on credit info("race" isn't a question on the credit app) and the dealership is allowed to hold upto 2 percentage points(IIRC) on ANYBODY. Obviously the higher the rate - the more the credit agency(banks) pay the Dealerships. Sounds to me like people need to educate themselves as to their credit rating and look at more options than just what the guy in the F&I office at the dealership tries to shove down your throat. Anyone who buys a car without doing their research (both on the vehicle and their finances) is a fool - no matter what "race" they happen to be.

This whole "race" shiz is overplayed. Educate yourself - don't blame other's for your ignorance.

CkG

edit- FYI - "backside/backend" means the finance side "Front end" is the purchase price side.

 

[DealMonkey]

Riiiiiigght, Cad. It's all their fault they get charged higher rates when all other factors are the same. Sure thing, you got it. There's no such thing as racism in this country, it's all just a lie to bring about more entitlements.

What a load of crap. You've been stuck in white-bread Iowa too long, my friend...

 

[Shelly21]

I was in Chesterfield country, VA getting a class 3 hitch installed for my Jeep last week, The people in the shop were using the N words left and right as if they were rappers. Too bad they were already halfway done with my hitch, else I'd take my business elsewhere..... I think I got ripped off for $270 for being a woman. :Q

 

[CADsortaGUY]

Originally posted by: DealMonkey
Riiiiiigght, Cad. It's all their fault they get charged higher rates when all other factors are the same. Sure thing, you got it. There's no such thing as racism in this country, it's all just a lie to bring about more entitlements.

What a load of crap. You've been stuck in white-bread Iowa too long, my friend...

Listen - fool - I sold Cars in Wausau,WI. I sold to ANYONE who wanted to buy a car. The F&I office tried to hold points on ANYONE they could. This I know for a FACT. I lost MANY deals because the F&I guy was playing the point holding game(or undercoating...or extended warrantee).
I sold cars to laotians(Hmong) all the time as I sold Toyotas as well as Mercedes, Jeep, Isuzu, and Hyundai. ANYONE who wasn't educated as to their financial rating was a target - and infact even the ones who were "educated" as to their standing sometimes ended up paying higher rates than the bank came back with.
If you wish to continue this - I suggest you get the FACTS, otherwise it's time for you to sit down and shut up.

CkG

 

[xxxxxJohnGaltxxxxx]

While going to grad school, I sold cars for awhile, then moved into the "box" (finance office); on our credit applications, there wasn't even a "race" box to check...when we pull their credit, we simply fill in the scores and look through our magical book of interest rates available based on the "tier" they qualify for, then assign a rate...nearly every single bank controlled how many points we could hold (how much over the % they will finance you for we add for 'overhead'...usually they let us hold 1/2%). Honestly, we don't care if you are black, white, gray, red...it's all about money. That said, however, I noticed that there were a disproportionate number of African Americans coming in with terrible beacon scores...most wouldn't qualify for a $100 loan, which classifies then as 'Auto Credit of Virginia' customers (controlled by the State of Virginia....ugh...29 1/2% and no car can cost more than $5K unless they have big money down)....in short, your "White man keeping the black man down" arguments are purely nonsense in the world of auto loans....


...perhaps these were incidents where the auto dealer finances in-house and his name is Billy Bob in Bumfok, Mississippi?

 

[xxxxxJohnGaltxxxxx]

Originally posted by: CADkindaGUY

Originally posted by: DealMonkey
Riiiiiigght, Cad. It's all their fault they get charged higher rates when all other factors are the same. Sure thing, you got it. There's no such thing as racism in this country, it's all just a lie to bring about more entitlements.

What a load of crap. You've been stuck in white-bread Iowa too long, my friend...

Listen - fool - I sold Cars in Wausau,WI. I sold to ANYONE who wanted to buy a car. The F&I office tried to hold points on ANYONE they could. This I know for a FACT. I lost MANY deals because the F&I guy was playing the point holding game.
I sold cars to laotians(Hmong) all the time as I sold Toyotas as well as Mercedes, Jeep, Isuzu, and Hyundai. ANYONE who wasn't educated as to their financial rating was a target - and infact even the ones who were "educated" as to their standing sometimes ended up paying higher rates than the bank came back with.
If you wish to continue this - I suggest you get the FACTS, otherwise it's time for you to sit down and shut up.

CkG

..should have read you post before I posted...you are correct, sir, but lay off the F&I guys We need to eat, too...."a deals a meal."

 

[CADsortaGUY]

Originally posted by: xxxxxJohnGaltxxxxx

Originally posted by: CADkindaGUY

Originally posted by: DealMonkey
Riiiiiigght, Cad. It's all their fault they get charged higher rates when all other factors are the same. Sure thing, you got it. There's no such thing as racism in this country, it's all just a lie to bring about more entitlements.

What a load of crap. You've been stuck in white-bread Iowa too long, my friend...

Listen - fool - I sold Cars in Wausau,WI. I sold to ANYONE who wanted to buy a car. The F&I office tried to hold points on ANYONE they could. This I know for a FACT. I lost MANY deals because the F&I guy was playing the point holding game.
I sold cars to laotians(Hmong) all the time as I sold Toyotas as well as Mercedes, Jeep, Isuzu, and Hyundai. ANYONE who wasn't educated as to their financial rating was a target - and infact even the ones who were "educated" as to their standing sometimes ended up paying higher rates than the bank came back with.
If you wish to continue this - I suggest you get the FACTS, otherwise it's time for you to sit down and shut up.

CkG

..should have read you post before I posted...you are correct, sir, but lay off the F&I guys We need to eat, too...."a deals a meal."

Heh - when you start to not eat because the F&I guy dicks with your customer - you don't lay off him On more than 1 occasion the F&I guy got paid more in commisions than I did when I did all the work to butter him up for the extended warrantee and interest stuff. It's a good thing I was a good freind of the F&I guy cuz I didn't get screwed as much as the other guys F&I guys have a lot of tricks they can pull....like lowering the selling price for the customer if they'll buy the warrantee etc:disgust:

CkG

 

[tnitsuj]

Originally posted by: CADkindaGUY
Heh - Well, I'm pretty sure "blacks" weren't the only people that Finance offices screwed(I'm sure in Wausau,WI - there were plenty of laotians who got "taken" on the back end - I know that for a FACT) They screwed anyone they could. Dealership make tons of money on the back side - this is nothing new. To claim that it is a racial thing is absurd as the Banks set the rates based on credit info("race" isn't a question on the credit app) and the dealership is allowed to hold upto 2 percentage points(IIRC) on ANYBODY. Obviously the higher the rate - the more the credit agency(banks) pay the Dealerships. Sounds to me like people need to educate themselves as to their credit rating and look at more options than just what the guy in the F&I office at the dealership tries to shove down your throat. Anyone who buys a car without doing their research (both on the vehicle and their finances) is a fool - no matter what "race" they happen to be.

This whole "race" shiz is overplayed. Educate yourself - don't blame other's for your ignorance.

CkG

edit- FYI - "backside/backend" means the finance side "Front end" is the purchase price side.

The article isn't talking about the rate that GMAC financing puts out. They are talking about the 3% (used to be more) that the dealer is allowed to tack onto whatever the bank approves.

 

[Corn]

I lost MANY deals because the F&I guy was playing the point holding game(or undercoating...or extended warrantee).

Same thing almost happened to our car salesman. The wife just leased a Pacifica from our local Chrysler dealership (chosen because they are one of her customers--it's her rule). Anyway the salesman got us the vehicle we wanted at the price we wanted, only to nearly lose the deal because the Finance Idiot tried to ramrod an extended warranty down our throats.

Here's my rule:

If I have to say no more than once, I'll take your deal somewhere else. If you make my wife cry I'm liable to help you swallow a few of your own teeth.

Unfortunately I was not feeling well that day and was in the restroom during this negotiation was happening between my wife and the Finance Idiot (I had thought the deal was all set and she was just signing papers.....). Well I come back and she's nearly in tears pleading with the fscker that she doesn't want the extended warranty and why none of her "three choices" has the "no, I don't want the extended warranty" option. I can't remember exactly what it was that I had said to that ass but before I was done those "three options" were filed away into the circular cabinet by a meek looking Finance Idiot.

 

[DealMonkey]

Originally posted by: CADkindaGUY
Listen - fool - I sold Cars in Wausau,WI. I sold to ANYONE who wanted to buy a car. The F&I office tried to hold points on ANYONE they could. This I know for a FACT. I lost MANY deals because the F&I guy was playing the point holding game(or undercoating...or extended warrantee).
I sold cars to laotians(Hmong) all the time as I sold Toyotas as well as Mercedes, Jeep, Isuzu, and Hyundai. ANYONE who wasn't educated as to their financial rating was a target - and infact even the ones who were "educated" as to their standing sometimes ended up paying higher rates than the bank came back with.
If you wish to continue this - I suggest you get the FACTS, otherwise it's time for you to sit down and shut up.

CkG

Oh yeah Cad, I bow down to your "superior" knowledge of auto dealers.

Please, spare me. If you actually READ the article, you'd see that the claim is thus:

"I have conducted numerous statistical tests of the data and conclude that the disparate impact against African-Americans cannot be explained by creditworthiness or other legitimate business factors," Cohen wrote.

If the claim is true, race is the factor that determines additional markups on loans financed by General Motors Acceptance Corp. A pretty serious charge, but I'm sure you'd explain it all way by saying that racism doesn't exist or that everyone gets marked up -- which means you clearly aren't paying attention, yet again.

 

[tnitsuj]

Originally posted by: DealMonkey

Originally posted by: CADkindaGUY
Listen - fool - I sold Cars in Wausau,WI. I sold to ANYONE who wanted to buy a car. The F&I office tried to hold points on ANYONE they could. This I know for a FACT. I lost MANY deals because the F&I guy was playing the point holding game(or undercoating...or extended warrantee).
I sold cars to laotians(Hmong) all the time as I sold Toyotas as well as Mercedes, Jeep, Isuzu, and Hyundai. ANYONE who wasn't educated as to their financial rating was a target - and infact even the ones who were "educated" as to their standing sometimes ended up paying higher rates than the bank came back with.
If you wish to continue this - I suggest you get the FACTS, otherwise it's time for you to sit down and shut up.

CkG

Oh yeah Cad, I bow down to your "superior" knowledge of auto dealers.

Please, spare me. If you actually READ the article, you'd see that the claim is thus:

"I have conducted numerous statistical tests of the data and conclude that the disparate impact against African-Americans cannot be explained by creditworthiness or other legitimate business factors," Cohen wrote.

If the claim is true, race is the factor that determines additional markups on loans financed by General Motors Acceptance Corp. A pretty serious charge, but I'm sure you'd explain it all way by saying that racism doesn't exist or that everyone gets marked up -- which means you clearly aren't paying attention, yet again.

I think his argument is that the dealership will try and mark up everyone and blacks just aren't smart enough/informed enough to know they are being taken for a ride.

 

[xxxxxJohnGaltxxxxx]

Originally posted by: CADkindaGUY

Originally posted by: xxxxxJohnGaltxxxxx

Originally posted by: CADkindaGUY

Originally posted by: DealMonkey
Riiiiiigght, Cad. It's all their fault they get charged higher rates when all other factors are the same. Sure thing, you got it. There's no such thing as racism in this country, it's all just a lie to bring about more entitlements.

What a load of crap. You've been stuck in white-bread Iowa too long, my friend...

Listen - fool - I sold Cars in Wausau,WI. I sold to ANYONE who wanted to buy a car. The F&I office tried to hold points on ANYONE they could. This I know for a FACT. I lost MANY deals because the F&I guy was playing the point holding game.
I sold cars to laotians(Hmong) all the time as I sold Toyotas as well as Mercedes, Jeep, Isuzu, and Hyundai. ANYONE who wasn't educated as to their financial rating was a target - and infact even the ones who were "educated" as to their standing sometimes ended up paying higher rates than the bank came back with.
If you wish to continue this - I suggest you get the FACTS, otherwise it's time for you to sit down and shut up.

CkG

..should have read you post before I posted...you are correct, sir, but lay off the F&I guys We need to eat, too...."a deals a meal."

Heh - when you start to not eat because the F&I guy dicks with your customer - you don't lay off him On more than 1 occasion the F&I guy got paid more in commisions than I did when I did all the work to butter him up for the extended warrantee and interest stuff. It's a good thing I was a good freind of the F&I guy cuz I didn't get screwed as much as the other guys F&I guys have a lot of tricks they can pull....like lowering the selling price for the customer if they'll buy the warrantee etc:disgust:

CkG

What? We change the price of the car to throw in Gap insurance and warrantees? ...say it isn't so As for "we do all the work," didn't your guys in the box ever try to sell the salesman on, "Sure, you think you do all the work, but you have 1-4 hours with the customer to build rapport, we have 15 minutes." I did my best not to sour a deal...would often leave the 'meat' on the front-end for the salespeople and take a hit on the back-end, but we have quotas to meet back there, too...Our main 'gross' people would always get priority in my chair, too...and drinks after work...and lunch brought to them on the lot...and I bought them smokes and cigars, etc I bet you hated the customers who wanted to take the rebate and go with financing the vehicle?if they thought they wanted the 0%, by the time they leave the F&I office, they?ll be singing a different tune?black or not.

 

[CADsortaGUY]

Originally posted by: tnitsuj

Originally posted by: CADkindaGUY
Heh - Well, I'm pretty sure "blacks" weren't the only people that Finance offices screwed(I'm sure in Wausau,WI - there were plenty of laotians who got "taken" on the back end - I know that for a FACT) They screwed anyone they could. Dealership make tons of money on the back side - this is nothing new. To claim that it is a racial thing is absurd as the Banks set the rates based on credit info("race" isn't a question on the credit app) and the dealership is allowed to hold upto 2 percentage points(IIRC) on ANYBODY. Obviously the higher the rate - the more the credit agency(banks) pay the Dealerships. Sounds to me like people need to educate themselves as to their credit rating and look at more options than just what the guy in the F&I office at the dealership tries to shove down your throat. Anyone who buys a car without doing their research (both on the vehicle and their finances) is a fool - no matter what "race" they happen to be.

This whole "race" shiz is overplayed. Educate yourself - don't blame other's for your ignorance.

CkG



edit- FYI - "backside/backend" means the finance side "Front end" is the purchase price side.

The article isn't talking about the rate that GMAC financing puts out. They are talking about the 3% (used to be more) that the dealer is allowed to tack onto whatever the bank approves.

Umm - hello? That is called "holding points" - ALL "good" F&I guys do that - REGARDLESS of race.

CkG

 

[tnitsuj]

Originally posted by: CADkindaGUY

Originally posted by: tnitsuj

Originally posted by: CADkindaGUY
Heh - Well, I'm pretty sure "blacks" weren't the only people that Finance offices screwed(I'm sure in Wausau,WI - there were plenty of laotians who got "taken" on the back end - I know that for a FACT) They screwed anyone they could. Dealership make tons of money on the back side - this is nothing new. To claim that it is a racial thing is absurd as the Banks set the rates based on credit info("race" isn't a question on the credit app) and the dealership is allowed to hold upto 2 percentage points(IIRC) on ANYBODY. Obviously the higher the rate - the more the credit agency(banks) pay the Dealerships. Sounds to me like people need to educate themselves as to their credit rating and look at more options than just what the guy in the F&I office at the dealership tries to shove down your throat. Anyone who buys a car without doing their research (both on the vehicle and their finances) is a fool - no matter what "race" they happen to be.

This whole "race" shiz is overplayed. Educate yourself - don't blame other's for your ignorance.

CkG



edit- FYI - "backside/backend" means the finance side "Front end" is the purchase price side.

The article isn't talking about the rate that GMAC financing puts out. They are talking about the 3% (used to be more) that the dealer is allowed to tack onto whatever the bank approves.

Umm - hello? That is called "holding points" - ALL "good" F&I guys do that - REGARDLESS of race.

CkG

We understand that, no one is disputing that dealers try and do that to everyone.

The point is that Blacks are consistently having more held than whites when you correct for all other factors.

Did you read the article?

 

[xxxxxJohnGaltxxxxx]

Originally posted by: tnitsuj

The article isn't talking about the rate that GMAC financing puts out. They are talking about the 3% (used to be more) that the dealer is allowed to tack onto whatever the bank approves.

Few banks allow dealerships to hold more than 3%...and those who do are shady. On average, I would say we get 1/2 - 1 1/2%, which adds up on 40-50 cars sold a day. But as was mentioned above, it's all based on your credit score and your ability to say, "screw that, I'll finance through my credit union and bring you a check tomorrow." ...get up out the chair...walk toward the door....I'll be by your side before you get back into the car...usually with the letterhead from any of the banks you use and a rate that matches what your credit union will pay....as long as you get gap insurance in exchange for free oil changes and lifetime state inspections

 

[Corn]

Oh yeah Cad, I bow down to your "superior" knowledge of auto dealers. Please, spare me. If you actually READ the article, you'd see that the claim is thus:

Sorry, but I have to agree with CAD. My experience with auto dealer's finance idiots is representative of the opinion that they try to jack everyone.

Why the disparity? Dunno, most likely it has to do with:

Inner-city dealerships are more agressive to maintain higher profit margins, possibly because of the higher cost of doing business there and lower profit margins on vehicles that sell well there (speculation on my part, but probably accurate).

 

[xxxxxJohnGaltxxxxx]

Originally posted by: tnitsuj


We understand that, no one is disputing that dealers try and do that to everyone.

The point is that Blacks are consistently having more held than whites when you correct for all other factors.

Did you read the article?

No, you must not understand what CAD is saying. Do you honestly think I would sit at my desk and say, "Well, this guy is white; I think I'll hold 1/2% although the bank will allow me to hold 1.5%...I don't need the extra $400 commission" That's the dumbest think I have every heard...green is the only color in the car business...period.

 

[CADsortaGUY]

Originally posted by: tnitsuj

Originally posted by: CADkindaGUY

Originally posted by: tnitsuj

Originally posted by: CADkindaGUY
Heh - Well, I'm pretty sure "blacks" weren't the only people that Finance offices screwed(I'm sure in Wausau,WI - there were plenty of laotians who got "taken" on the back end - I know that for a FACT) They screwed anyone they could. Dealership make tons of money on the back side - this is nothing new. To claim that it is a racial thing is absurd as the Banks set the rates based on credit info("race" isn't a question on the credit app) and the dealership is allowed to hold upto 2 percentage points(IIRC) on ANYBODY. Obviously the higher the rate - the more the credit agency(banks) pay the Dealerships. Sounds to me like people need to educate themselves as to their credit rating and look at more options than just what the guy in the F&I office at the dealership tries to shove down your throat. Anyone who buys a car without doing their research (both on the vehicle and their finances) is a fool - no matter what "race" they happen to be.

This whole "race" shiz is overplayed. Educate yourself - don't blame other's for your ignorance.

CkG



edit- FYI - "backside/backend" means the finance side "Front end" is the purchase price side.

The article isn't talking about the rate that GMAC financing puts out. They are talking about the 3% (used to be more) that the dealer is allowed to tack onto whatever the bank approves.

Umm - hello? That is called "holding points" - ALL "good" F&I guys do that - REGARDLESS of race.

CkG

We understand that, no one is disputint that dealers try and do that to everyone.

The point is that Blacks are consistently having more held than whites when you correct for all other factors.

Did you read the article?

Yes - I read the article. What you seem to not understand is that EVERYONE is subject to these "markups". Those that are more aware of their credit standing or have the common sense to seek other rates(other banks/CUs) end up not paying as much on the finance side. Now again - how is this a "race" issue? Is this article trying to say that "Black" people are suckers? or just not informed? or....? Because it sure as hell isn't "discrimination".

DM - You obviously don't understand/comprehend what takes place in the F&I office and what rules they play by. So yes - STFD and STFU I know what the hell I am talking about. If people tried to claim that individual dealerships "discriminated" against certain "races" you might have a better case - but to claim that a finance company is "discriminating" based on race is absolutely absurd.

CkG

 

[DealMonkey]

Sure, Cad just spew the same crap over and over. I understand perfectly how dealers try to screw everyone. That doesn't make it an excuse when you look at the statistics of over 1.5 million loans and see the resulting discrimination against blacks. See no evil, right Caddy ol' boy?

 

[CADsortaGUY]

Originally posted by: DealMonkey
Sure, Cad just spew the same crap over and over. I understand perfectly how dealers try to screw everyone. That doesn't make it an excuse when you look at the statistics of over 1.5 million loans and see the resulting discrimination against blacks. See no evil, right Caddy ol' boy?

Answer me this then. How does a financial institution "discriminate" against "blacks" when that info isn't on the credit app? Hmmm?

I don't question the stats - that very well could be. But it doesn't mean GMAC is discriminating against "Blacks" due to race. Like I said - this *might* be able to hold water if they could show that individual dealerships were "discriminating" based on race - but to accuse a colorblind lending agency of it is absolutely absurd.

CkG

 

[xxxxxJohnGaltxxxxx]

...as someone posted before, it is more of a 'informed consumer' argument:

"Such markups are "pure profit gouging" regardless of the lender, Rossman said. "People always negotiate hard for the purchase price of a car but don't think they have the right or ability to negotiate for the interest rate. The result has allowed dealers to make these markups." [/i]

 

[xxxxxJohnGaltxxxxx]

They have discussed this in Consumer Reports before, in the "How to Buy a Car" section. Many people with whom I negotiated said they read in consumer reports blah blah blah...I wonder what percentage of Consumer Reports readers are White vs. Black...wonder if Mr. Statistics controlled for the amount of information gathered prior to entering the door of the dealership....

 

[BOBDN]

I have read studies done as far back as the 60's and 70's where non-white Americans are charged more for credit, housing and major purchases.

This has nothing to do with car dealers screwing everyone and everything to do with an indemic socio-economic problem in our society. It's been going on too long to be justified by people who aren't affected by it.

 

[her209]

assuming that a person and a black person has the same credit background, should they both be getting the same deal?