NADA Expands Effort to Protect Dealer-Assisted Financing
WASHINGTON, D.C. — The National Automobile Dealers Association (NADA) has launched a new initiative to highlight the true economic value of dealer-assisted financing, including video testimonials and a new website, officials announced this week.
On the new site, users can view testimonials from real consumers who benefited from receiving financing through a dealership.
"Consumers save money every day when they finance through dealerships, but that truth is getting lost in Washington, and that needs to change," said NADA President Peter Welch. "The stories that we're highlighting are far from unique. Dealers across the country save consumers money every day, and right now Washington is failing to understand what's at stake for these consumers and millions more if competition is stifled and dealers are prevented from offering discounts on financing."
In today's vehicle finance market, local dealerships are able to shop a customer's credit application to dozens of lenders all competing for the same loan. As a result, dealers usually offer better interest rates than consumers can find on their own. Furthermore, dealers have the ability to discount their rates to meet or beat a competing credit offer, which results in further savings for consumers.
"Most consumers know that financing is available at their local dealership, but what many don't know is that dealer-assisted financing usually saves them money," Welch added. "Many policymakers might not realize this either, but once the savings that comes from dealer discounting is made clear, it will be hard for Washington to turn a blind eye."
The initiative is part of the NADA’s effort to stop the Consumer Financial Protection Bureau from restricting or eliminating the ability of dealers to provide competitive financing. The regulator has been targeting dealer markups, which it believes cause minorities to pay higher rates. But NADA officials have said the CFPB’s actions will have a negative effect on consumers’ ability to secure affordable auto loans.
Earlier this year, Reps. Frank Guinta (R-N.H.) and Ed Perlmutter (D-Colo.) introduced legislation — H.R. 1737 — that would promote transparency at the CFPB in order to help ensure that its policies do not unintentionally hurt consumers. In July, the legislation, which has 55 Democratic and 71 Republican cosponsors, passed the House Financial Services Committee on a 47-10 vote. The bipartisan vote included the support of 13 of the committee's 26 Democrats, and House Republicans have indicated that the bill may come to the floor for a vote within the coming weeks.
"Our message is getting out, the facts are on our side, and people are starting to take notice," Welch said. "But there's too much at stake for consumers, so we don't intend to take our foot off the gas until we know that consumer rights and consumer savings are adequately protected."
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