TEST 1
Do White Buyers Get Better Loan Deals From Car Dealers?
By Alan Zibel
White car buyers are more likely to get better interest rates from car dealers than minorities, even if they don’t spend time and effort haggling to get the best rate, according to research by a consumer group.
A survey of car buyers conducted for the Durham, N.C.-based Center for Responsible Lending is likely to add fuel to the debate about whether minority car buyers are treated fairly at dealerships, an issue being investigated by government officials. The report, released last week, concludes that minorities still receive higher rates, even if they try to negotiate with their dealer.
The consumer group’s survey of 946 consumers who bought a car over the past six years asked them to detail their interest rate and financing terms and whether they tried to negotiate their interest rates. It found that white borrowers paid an average annualized percentage rate of 4.5% on their loans, compared with 6.2% for African-Americans and 6.9% for Latinos.
This disparity existed even though white borrowers were less likely to negotiate rates than minorities, the report found. About 22% of white borrowers tried to negotiate their interest rate with a dealer, compared with 32% of blacks and 39% of Latino borrowers. Whites that did not try to negotiate still received lower rates than African-Americans or Latinos that did, the report found.