The column on dumping the finance reserve is somewhat shortsighted.
What most consumer advocate groups seem to disregard is the effort that goes into securing an individual loan, packaging it for funding and tracking the receivable.
Tiered pricing was designed to enable more consumers to acquire a vehicle on a time sale. Those who benefit the most are the marginal credit customers who may not normally enjoy a prime loan from a bank.
Those loans are also the most difficult to package because of stricter requirements for approval and funding. Without a reasonable markup or profit margin for the effort involved, the cost/benefit to the retailer may not be sufficient to warrant the effort.
Finance departments are available to clients as a service, not a requirement. I don't know of a single dealership that does not welcome cash or other bank financing.
While the consumer groups have the best intentions, a better solution must be found. A nominal flat fee will not support the expense of providing that service or adequately compensate the finance professionals in the field.