"Rosemary Shahan is a real example of a
citizen-activist. She is as tenacious as a bulldog, consistent as the Milky Way,
and as humane in her own way as Mother Teresa."
Consumer Survivor Advocate, Rosemary Shahan, works to
from Predatory Auto Loans
Shahan, President of CARS with Senator Byron Sher (D-Palo Alto) advocating
for a new law to toughen protection for consumers whose "lemon"
vehicles have life-threatening defects. For more
information about the California Lemon Law- http://www.caag.state.ca.us/consumers/general/lemon.htm
Consumers of Auto Reliability and Safety
(CARS) and Predatory Auto Loans
Consumers for Auto Reliability and Safety (CARS) is a national auto safety
and consumer safety organization dedicated to preventing motor vehicle injuries
and fatalities and economic losses. Itís founder and president is Rosemary
Shahan who has worked over 24 years in public service. She is on the Board of
Directors of the Consumer Federation of America and is also on the Board of
Directors of the Consumer Federation of California. CARS has received many
public service awards including the Consumer Action Award of Excellence and the
National Association of Consumer Advocate Award.
Rosemary Shahan is a consumer survivor advocate,
someone who has suffered from anti-consumer corporate policies and decided to do
something about it so that others don't have similar experiences. Currently, CARS is working on a campaign to eliminate fraudulent auto
financing practices for new and used automobiles. Auto dealers and auto
financers deceive buyers into believing they are getting good interest rates on
their auto loans, when in fact they are being charged excessive amounts of
Because of CARS' work on this issue, Governor Davis in California has just
signed into law a bill that will curb the hidden excessive interest that car dealers
CARS is raising public awareness of this predatory auto lending practice and
educating the public about how to avoid being victimized.
Car Dealer Scam Costs Consumers Billion$
Information in Spanish
For Brochure (pdf) format click here.
For a Brochure in Spanish (pdf) format click here.
Buying a new or used car?
Don't get cheated by "Phony Financing"
It's the auto industry's dirty little secret.
It happens to millions of car buyers every year. Even
the most sophisticated, savvy consumers. And you
don't even realize you've been cheated.
The secret? Auto dealers commonly bump up the interest rate you pay to finance your car, truck,
or SUV. Over the life of the loan, the extra
hidden interest you pay costs you hundreds or even
thousands of dollars in added financing costs. These are
costs you should not have to pay.
For example, if your credit is good, you may
qualify for a loan with a 4% interest rate. But the
dealership charges you 8%. Or 12%. Or sometimes 21%
The dealer gets a hidden "kickback" or fee from
the lender based on the amount of interest you pay.
The more you pay in interest, the more profit the
dealer makes. Typically, the dealer and lender split the
extra interest you pay 60-40, with the dealer pocketing
the lion's share.
The dealership finance manager may seem
friendly and tell you, "Don't worry. I'll get you the
best possible rate." But instead, he will charge you
the highest rate he can. He may even mislead you
into thinking your credit is worse than it really is.
This scam affects almost everyone who finances through a car dealer. But studies show that the
added costs are likely to be even higher if you are
African American or Latino
How can you avoid Phony Financing?
BEFORE you go to buy a car!
Whenever possible, buy an affordable vehicle
without getting a loan. But whether you pay cash or get a
loan, you can save thousands of dollars if you do
your homework. Check out prices and models BEFORE you visit a dealership.
- Check Consumer Reports online
Consumer Reports Car Buying Guide, available
at bookstores and public libraries.
- Use Consumer Reports car pricing service.
New car buyers who use this service save an
average of $2,200. No computer access? For new or
used vehicles, call: 1-800-258-1169. (This
costs about $12 and requires a credit card.)
- Or, after you decide on a particular
model, ask a bank or credit union to show you the Kelley Blue Book, or check it out online at www.kbb.com. Also check classified
ads in local newspapers. Prices may be lower in your area.
- Join a credit union. Credit unions often
offer better rates than banks. Membership requirements vary. Look up "Credit
Union" in the yellow pages, call around, and find
out how to join.
Know the Score
- Find out your credit score by asking your
bank or credit union, or checking online at www.myfico.com (for about $12) or at
e-loan.com (for free). Figure out just how
good your credit is, and take steps to make
corrections and improve it.
- Check out interest rates online at e-loan.com or
get financing from a dealership unless they can
beat the rates you could get online or from a bank
or credit union.
- Ask online lender, bank or credit union to
pre-qualify you for a loan.
- No computer access? Shop around at 3 or 4
banks and tell them you are comparing where you can get the best deal. If one offers you
a loan at 6%, see if another bank will beat that offer. Make them compete for your business.
Some Useful Links: