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Car dealers jacking up add-on prices, discriminating against Hispanics, study finds

Frank Witsil, Detroit Free Press on

Published in Automotive News

"Any dealer who's had to deal with these programs can tell you that they are not only trust killers, but they're brand killers too," he said. "Not being able to offer two customers the same price on the exact same equipped vehicle, just because they came into the dealership on different days of the month, destroys consumer confidence."

Marisabel Torres, a senior policy analyst at the Washington-based advocacy group UnidosUs, said the discrimination findings were especially troubling.

"The fact that Latino consumers were charged in excess for unnecessary add-ons in the car buying process demonstrates a need for increased oversight in this sector of the market," she said. "We urge state and federal authorities to further investigate and bring enforcement actions against those found to be engaging in these discriminatory practices."


Based on its study's findings, the National Consumer Law Center is urging these public policy changes:

-- Dealers should be required to post add-ons and their prices. Each car should include the price of add-ons. This would make the deals more transparent and allow car buyers to compare prices among dealers.


-- Require documentation of race or national origin for credit transactions. The data is required for mortgage transactions, but not for other credit agreements. Without the data, it is difficult to identify any discrimination patterns.

-- Investigate discrimination pricing of add-on products. The Consumer Financial Protection Bureau, the Federal Trade Commission, the Federal Reserve Board, and state attorneys general all have authority in this area.

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