Don't get Cheated over your car loan!

Free downloadable brochure about Phony Financing.
(You are welcome to duplicate this pdf file for your family,
friends, church group, or anyone you like.)

Did you know that car dealers, banks, and finance companies profit handsomely from charging consumers with excellent credit as if they were a bad risk?

For most consumers, good credit is something you work hard to have. You make your payments on time. You hold down a job, and are a financially responsible person. So–when you buy a car, you expect to be treated fairly, and get an interest rate that reflects your good credit, right?

Auto dealers and lenders say: wrong. Dealers and lenders have secret arrangements that allow them to profit by charging you a higher interest rate than you deserve. Then they split the proceeds, which are a windfall for them. They may even tell you "This is the best rate we could get. We shopped it around, and this is the best we can do for you." All the while, they know you actually qualified for a much better interest rate.

These hidden charges can cost you hundreds or even thousands of dollars over the life of your loan. They can also lengthen the time it takes for you to pay off your loan. Instead of having that money for food, school tuition, medical care, a better car or truck, or other necessities of life, you end up giving it to the high-rollers.

When finance companies allow dealers to raise the rates on millions of transactions, they rake in hundreds of millions of dollars in excessive charges. Some reports, based on authoritative analyses of over one million records, have found that nearly everyone who takes out a loan through a car dealer may be overcharged. But if you are African American or Latino, you are more even likely to be overcharged, and the average amounts tend to be even higher. In other words, the impact on car buyers is discriminatory. It is not based on risk, but on race.

How can you avoid being taken by this scam?

1. Shop around for financing before you set foot on a car lot. Your bank or credit union will probably give you more favorable rates.

2. Check out online lenders like eloan.com or peoplefirst.com. Eloan actually has a place on their homepage where you can find out your own credit score for free, which will help you figure out what you should expect for a loan.

What if you suspect you've been taken for a ride over your car loan?

Falling interest rates make refinancing a car loan a very attractive step for many car buyers. You may be able to save a bundle by refinancing, and it's pretty simple to do.

According to Kathy Kristof, author of Kathy Kristof's Complete Book of Dollars and Sense, Corey Young, a medical-plan salesman, refinanced his car loan and saved about $1,300. "Unlike refinancing a house, in which the borrower probably will pay thousands in appraisal costs, there are few fees associated with an auto refinance. The only fee Young paid was a $15 lien transfer charge."
--(Los Angeles Times, September 22, 2002.)

Comparison shop for the best rate on refinancing. Check with your bank or credit union, or go online to companies like eloan.com and peoplefirst.com. Find out where you can get the best rate, with the lowest fees.

If you find out you were overcharged, please send a postcard or brief note to CARS at: 926 J Street, Suite 522, Sacramento, CA 95814. CARS is working to curb predatory auto lending practices, and help consumers keep from getting a raw deal.

Been scammed? Or saved $$$ by refinancing? Tell CARS about it.