Joan Claybrook was the administrator of the National Highway Traffic Safety Administration from 1977 to 1981.
Your Feb. 14 editorial "Capping loan markups is not government's job" suggests that limiting auto dealer loan markups is unacceptable in a market economy.
Yet hundreds of letters we've received from consumers during the past year indicate that market principles are deliberately evaded by dealerships when arranging financing.
While most consumers know to shop around for the best vehicle price, consumers generally do not understand the need to shop just as competitively on loan terms.
Often, buyers are made to wait for hours before dealing with the F&I department, are intimidated or wheedled into monthly payments well above their expectations, or are yanked back into the dealership for a new yo-yo deal that substantially increases their costs - a week or more after they believe the deal has been done.
In sum, loan deals are not made between two parties of equal knowledge.
Capping loan markups at a set amount such as $150, as California's ballot initiative proposes, will not detract from legitimate dealer profits and is well within state usury laws, which regulate abusive credit and loan transactions.
Arranging financing so that a vehicle can be purchased should be handled as a service to customers, not as a source of ill-gotten additional profit for dealerships.