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Auto Loan Markups: Car Dealers Hike Auto Loan Interest Rates
Aired January 27, 2004 - 06:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Well time for a little 'Business Buzz.' Car buyers beware, you may not be getting the best rate on your auto loan.
Carrie Lee has the story from the Nasdaq market site in Times Square.
What, we're getting ripped off?
CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Well you might be, Fredricka, if you finance your car through the dealership.
A new report from the Consumer Federation of America says just that. Says that U.S. car buyers are being charged at least hundreds of millions and as much as a billion dollars annually in undisclosed finance markup charges when they finance their cars at automobile dealerships. A report from the CFA describes a markup practice that is -- quote -- "encouraged by all of the auto industry's leading captive finance companies and top auto lending banks.
The report also says automakers and banks encourage car dealers to markup interest rates on loans to buyers and then they split the difference. We're talking about anywhere from $400 to $5,000 here.
Now the National Automobile Dealers Association defends the dealer's markups as reflecting fair compensation for providing a retail finance service. But still, this is something, Fredricka, that people may not even be aware of when they are financing a car. So hopefully now they are.
WHITFIELD: Well now they are. Thanks a lot. And looking ahead for the futures.
LEE: Futures for stocks today pointing to a bit of a weaker open. We saw a very nice rally yesterday, though. The Dow, the Nasdaq, the S&P 500 all gaining ground to levels seen not since the 9/11 attacks, the September 11 attacks about two-and-a-half years ago.
One stock to watch, Texas Instruments. Fell a bit in the after- hours session. They beat the Street estimates on the fourth quarter, gave solid guidance for this current period. The issue here is that expectations are so high on Wall Street looks like we saw some profit taking. People just getting out of the game because expectations are very high these days for profits -- Fredricka.
WHITFIELD: All right, thanks a lot, Carrie.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
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Aired January 27, 2004 - 06:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Well time for a little 'Business Buzz.' Car buyers beware, you may not be getting the best rate on your auto loan.
Carrie Lee has the story from the Nasdaq market site in Times Square.
What, we're getting ripped off?
CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Well you might be, Fredricka, if you finance your car through the dealership.
A new report from the Consumer Federation of America says just that. Says that U.S. car buyers are being charged at least hundreds of millions and as much as a billion dollars annually in undisclosed finance markup charges when they finance their cars at automobile dealerships. A report from the CFA describes a markup practice that is -- quote -- "encouraged by all of the auto industry's leading captive finance companies and top auto lending banks.
The report also says automakers and banks encourage car dealers to markup interest rates on loans to buyers and then they split the difference. We're talking about anywhere from $400 to $5,000 here.
Now the National Automobile Dealers Association defends the dealer's markups as reflecting fair compensation for providing a retail finance service. But still, this is something, Fredricka, that people may not even be aware of when they are financing a car. So hopefully now they are.
WHITFIELD: Well now they are. Thanks a lot. And looking ahead for the futures.
LEE: Futures for stocks today pointing to a bit of a weaker open. We saw a very nice rally yesterday, though. The Dow, the Nasdaq, the S&P 500 all gaining ground to levels seen not since the 9/11 attacks, the September 11 attacks about two-and-a-half years ago.
One stock to watch, Texas Instruments. Fell a bit in the after- hours session. They beat the Street estimates on the fourth quarter, gave solid guidance for this current period. The issue here is that expectations are so high on Wall Street looks like we saw some profit taking. People just getting out of the game because expectations are very high these days for profits -- Fredricka.
WHITFIELD: All right, thanks a lot, Carrie.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
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