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E-mail this ArticleNew-car dealers may become more up-front and flexible about negotiating the interest rates for new car loans. Earlier this year, three trade groups representing banks, auto finance companies and dealerships supported fuller disclosure to consumers by their member institutions.
Under the new voluntary guidelines, contracts would clearly spell out that consumers may negotiate the annual percentage rate (APR) for new-car and new-truck loans. Furthermore, they would disclose that the dealer may make a profit for providing financing.
The American Financial Services Association (representing consumer credit firms), the Consumer Bankers Association, and National Automobile Dealers Association hope that "greater transparency" will help shore up consumer faith in dealer-assisted financing.
In late January, the Consumer Federation of America reported that undisclosed financing charges cost blacks, Hispanic and other consumers $1 billion each year.
