I would suggest that Stephen Brobeck take caution in his attack on auto finance rate markups. Although there may be some discrimination in the industry, giving the dealer the right to mark up loan rates provides a valuable service to the consumer.
Besides the obvious convenience factor, it is sometimes necessary to raise the rate to help finance a consumer who is trading in a vehicle with negative equity.
Without the dealer's ability to raise the rate, the consumer would possibly have to pay that negative equity amount out of his own pocket.
The reason is that most lenders will allow only a certain dollar amount to be financed in relation to the value of the vehicle. That is to ensure that the lender is in an equity situation if the buyer defaults on the loan.
Eliminating the dealer finance markup will severely hurt consumers and the auto industry as a whole.
It will lead to the elimination of finance choices for consumers, which leads to less competition and ultimately higher interest rates for everyone.
The key for the consumer is education. The Internet makes that easy. More and more car buyers are using the Internet to educate themselves before going to the dealership to buy a car.
The auto industry is rooted in negotiation. It has always been that way, and it will continue to operate that way as long as a consumer has a used vehicle to trade.