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DONNA HARRIS

AARP promotes dealer finance profit as ‘kickback’

Donna Harris covers automotive retailing for Automotive News.
On the “Your Money” page of the most recent AARP Magazine, there’s a small article titled: “Dealers Disguise Profits: Duck these fees.”

Underneath the headline it reads, “The Center for Responsible Lending says car buyers pay an extra $20 billion a year because dealers routinely mark up the interest rate of loans they broker.”

The organization says interest-rate markups are excessive -- even though they're within legal limits and below the cap set by the lender.

On its Web site, the group refers to these markups as “kickbacks” and “overcharges.” A spokeswoman reiterated that sentiment when I discussed it with her.

The Center for Responsible Lending lobbies state legislatures and Congress. It sent out a press release saying that “auto dealers’ lending abuses cost billions.”

No wonder dealers find it necessary to keep politically active.

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