Report alleges discriminatory financing by dealerships

A report released Thursday by the National Fair Housing Alliance alleged that it found racially discriminatory pricing tactics in car financing by dealerships.The report, which focuses on indirect lending whereby dealerships help to arrange financing from lenders, found stark differences in the way that white and nonwhite customers were treated when they were presented financing options. The report found that 63 percent of the time, nonwhite consumers were presented with heftier pricing options than their white counterparts, even though the white consumers were less creditworthy."Overall, this investigation found that, when auto dealers have pricing elements at their discretion, there is an opportunity for discrimination to occur," the report said. "This investigation revealed that, more often than not, auto dealers took that opportunity to discriminate."The findings were based on an investigation into eight dealerships selling seven brands in eastern Virginia.That tiny sample size was one of many complaints the National Automobile Dealers Association had regarding the report and its findings.“Every customer deserves to be treated fairly. There’s no place for discrimination in auto lending or sales,” said NADA spokesman Jared Allen.But, he added, “It’s highly irresponsible to draw conclusions from a study based on a handful of interactions that did not even lead to sales in a market where 17 million sales occur each year. The claims made in the report are in no way representative of the majority of new-vehicle interactions.”A spokesman for the American Financial Services Association said the Washington group, which includes most automotive, credit card and other lenders, had not yet had a chance to read the report or examine its methodology, but added that AFSA “and its 450 member companies condemn any form of discrimination in auto lending and in our society as a whole.” Methodology

Report alleges discriminatory financing by dealerships

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