Just when you think plaintiffs' attorneys can't get any goofier in their attack on the American car dealer, along comes a case of dealer greed that verges on horror.
The latest goofy attack: An attempt to force dealers to "justify" their profit for arranging customer financing. This is crazy. Should the lawyers have to justify their take of the booty?
Nonetheless, what is to be done about the dealer who can't resist throwing a naive customer up against a wall and fleecing her? How about a $6,000 dealer pack on a Toyota Avalon sold to the retired schoolteacher who can't say no? More on that later.
The idea of requiring "business justification" for a profit on financing comes from the case of some black plaintiffs against Primus Financial Services Inc. It seems that black consumers on average pay more to the dealer for the dealer finance reserve than do white customers.
It's not because Primus discriminates. Primus doesn't know if the customer is black or white, and Primus gets no more money either way. But on average, it appears that dealers are able to negotiate their own higher markup with black customers.
The plaintiffs' attorneys propose limiting any dealer's finance profit on a Primus contract to $500, absent "business justification" for more.
Whoa. Why not apply that principle to everything? When the poor, uninformed consumer buys a carton of milk, why should the store get whatever price it lists? Or the dairy? Or the farmer? Let them justify it!