• Jun 24, 2010
Congress is working on reforming financial oversight in the wake of the sub-prime mortgage meltdown, and if the House and Senate come together on a compromise bill, a new Bureau of Consumer Financial Protection will be created. The House's bill exempted auto dealers from more strict lending scrutiny. As currently written, the Senate's bill includes the 18,000 new car dealers in the United States under its umbrella. There is a non-binding resolution that urges adoption of the House car dealer exemption, and dealers suggest they're already regulated plenty.

As a source of financing, auto dealers work like any other lender, including some scams and shady practices that put people into situations they can't afford or insert hidden fees into fine print. Despite the National Association of Auto Dealers protests that auto dealers are already well-regulated, anyone who's fallen prey to these exploitative lending practices would beg to differ. The fight is not resolved, with Senator Sam Brownback of Kansas arguing on behalf of car dealers on Main Street, and the White House arguing on behalf of consumers. Debate is ongoing, but a vote is expected soon.

[Source: The Detroit News]


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  • 19 Comments
      • 4 Years Ago
      So, it's OK for auto dealers to rob you blind but everyone else is being held to a higher standard? Am I missing something?
        • 4 Years Ago
        I don't understand how people feel they're generally getting "robbed blind". In some used car lots for sub-prime buyers...maybe. At your average new-car dealership, the best thing a buyer can/should do is make sure they understand what they're paying for, what the vehicle is worth, and what they can afford. If you go in blind, then that's your fault. Many dealerships are interested in repeat buyers, so those dealers understand the concept of treating people well and making them feel good about the deal.
        • 4 Years Ago
        @Doug: You say that, but it's even an issue with new car dealers. Some of them like to negotiate in the customer's native language (e.g. Spanish, Chinese, whatever), then present a contract in English with different terms. California eventually passed a law against this practice.
        • 4 Years Ago
        The sad thing is that car dealership finance departments probably need this oversight more than anybody else. I mean your credit card might charge you a crazy interest rate if you don't pay it in full every month but it's not like the bank puts on the full court press to screw you as much as possible as the car dealerships do.
        • 4 Years Ago
        No, you've got it right. Dealers should be held to the same standards as everyone else.
      • 4 Years Ago
      The idea that the (crooked) senate is providing oversight and regulation to the (crooked) car dealers is an exercise in sheer silliness. The spokesman for NADA - Tonkin - described his group's effort to have "neighborhood convenience" for car buyers by defeating the bill that would ensure crooked car dealers do not charge usurious financing fees and engage in deceptive or illegal trade practices. And of course people like McConnell are all over it, delighted, for a hefty campaign contribution, to give the NADA a red carpet to rip off the public.
      What a joke this country has become.
        • 4 Years Ago
        amen, Cedar, however corporate-backed D's are letting the R's get away with it. Put the blame on leadership. They're also protecting payday-lenders in the bill. The poor really have no one looking out for them in DC.
      • 4 Years Ago
      Of course all loans should fall under regulation controlling the mismanagement that caused the economic meltdown, I find it truly sad that the 'solution' always includes another government agency's creation. The CIA and FBI fail? Let's create the DHS. Businesses play casino capitalism? Let's create a bureau of consumer finance protection.

      Which of course means more government costs, which means (at some point) higher taxes.
      • 4 Years Ago
      One way to help beat the dealers at their own game (what with their 2-4% markups and all) is to refinance your car loan. I was able to lower my monthly payment by $78 after doing a car loan refinance. Online tools like MoneyAisle.com make it easier than ever, especially now that car dealer lobbyists have earned car dealers this exemption from oversight.
      • 4 Years Ago
      Just like most high school bullies become a cops, most high school pot dealers become "the finance guy". More regulation? Nooooooo, they're as honest as the mileage on their 2002 Lexus with aftermarket rims (they always drive eight year-old Lexus GS's, don't know why).
        • 4 Years Ago
        Where are you buying cars?!
        rjander03
        • 4 Years Ago
        Sounds like somebody had their pants pulled down at a dealership once or twice...
        • 4 Years Ago
        They're exactly the same guy where ever you go. Greasy-palmed Greg lurks in dealerships from Hyundai to Audi. Avoid him. Get a loan from a bank before you go in. You're going to refinance out of your manufacturer loan anyway. And at BMW dealers, they're the ones with the decade-old M3 with the non-factory paint color.
      • 4 Years Ago
      Around these parts majorauto.com can be added to the list of crooked dealers... people get slapped with 18-24% APR on cars...mostly young kids that want a car badly lol..
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