The story "Calif. cracks down on dealer finance" (July 21) contains an incorrect definition of loan markups.
The second paragraph defines the loan markup as "the difference between the interest rate that a finance company will give a customer and the rate that the dealer actually gives the customer."
Actually, finance companies - or any other potential assignees, for that matter - don't have direct contact with the customer at any time during the transaction.
Once it receives a completed credit transaction from the dealership, the company decides whether it is willing to buy it, notifies the dealership of its decision and, if applicable, offers the dealership a wholesale rate, often called a "buy rate." That rate at which the finance company is willing to buy the contract from the dealership is not available to the consumer.
That topic is among the many fundamentals of dealership financing covered in "Understanding Dealership Financing," published by the American Financial Services Association Education Foundation and the National Automobile Dealers Association, along with the Federal Trade Commission.