A proposed California ballot initiative that would limit dealers' finance profits won't save consumers any money, says the head of the California Motor Car Dealers Association.
The proposal, which would cap finance profits at $150, would cut deeply into dealers' profits, says association president Peter Welch.
But Welch says that doesn't mean buyers would pay less to finance their vehicles. They'll pay the extra to their financial institution instead, he says.
Consumers for Auto Reliability and Safety, a California consumer advocacy group, is sponsoring the initiative, which could appear on the state's November ballot.
Rosemary Shahan, the group's president, says the proposal is intended to protect consumers from unscrupulous dealers. "What's different about financing is (your credit rating) is something you earn," she says. "The vast majority of people have no idea that dealers get a kickback or that interest is negotiable."