Fast Facts--Auto Financing
- About 87% of families in the U.S. owned at least one vehicle as of 2007.
- In 2010, the auto industry reported $621 billion in new and used sales representing 48.3 million units.
- Over 79% of the auto loan volume is made through third-party indirect lenders that partner with dealerships.
- Consumers who financed their cars through a dealership pay over $25.8 billion in additional hidden interest over the lives of their loans.
- The average hidden interest rate added by dealers is 2.47 percent.
- A borrower with weaker credit may see a hidden rate increase of 2.84% to 5.04% when they finance their vehicle through the dealer.
- A rate markup increases the odds of default by 12.4% and repossession by 33% for subprime borrowers.
- According survey data, 79% of consumers are unaware that dealers can markup rates without their consent.
- African Americans and borrowers making less than $40,000 per year are more likely to purchase dealer add-on products.
- Consumers who experience a yo-yo scam receive on average an interest rate that is five percentage points higher.
