Consumers who finance their vehicles through auto
dealerships are charged at least hundreds of millions and perhaps as much as
a billion dollars annually in undisclosed finance markup charges, reports
the Consumer Federation of America, Washington, D.C. These hidden
markups typically add at least $1,000 to the cost of an auto loan.
This markup practice is encouraged by all of the auto
industry's leading captive finance companies and top auto-lending banks.
Marked-up finance rates are determined arbitrarily by the dealer and
encouraged by the lender, regardless of the consumer's creditworthiness,
with kickbacks to both.
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