The lawyers who got General Motors Acceptance Corp. to lower its cap on dealer finance rate markups aim to eliminate percentage markups altogether within two years.
The plaintiffs' lawyers say they are a step closer to their goal after settling a class-action lawsuit against GMAC last week.
The settlement lets dealers continue to profit by adding to the annual percentage rate lenders offer them for consumer car loans. But it brings down the ceiling on markups from 3 percent to 2.5 percent. The plaintiffs' lawyers say they will push for more concessions until the markups are replaced with flat fees.
"A flat fee is more objective," says lawyer Clint Watkins of Brentwood, Tenn. "We see this as a long-term project."
Watkins is part of a team of lawyers that has similar suits pending against major lenders such as Chrysler Financial, Ford Motor Credit Co., Toyota Financial Services and Bank of America.
The lawyers shared in $9 million in legal fees authorized by a federal court in Nashville, Tenn., in the GMAC case. There will be no payments to the plaintiffs in the class-action lawsuit.