Consumer Voices are Centerpiece of NADA Advocacy on Financing
IN NEW NADA INITIATIVE, CONSUMERS TELL THEIR OWN STORIES OF SAVING ON FINANCING AT THE DEALERSHIP
WASHINGTON (Sept. 16, 2015) - The stories of real consumers who saved money by financing new vehicle purchases through local dealerships are at the center of an initiative by the National Automobile Dealers Association (NADA) to showcase the true economic value of dealer-assisted financing.
Through video testimonials and a new website - nada.org/autofinance - NADA is bringing the voices of consumers back into the debate over dealer-assisted financing. Dealers have been fighting to preserve the fiercely competitive, pro-consumer financing model ever since it came under threat from the Consumer Financial Protection Bureau (CFPB) in 2013.
"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.
Yet despite the fact that every day thousands of consumers save money on new vehicle purchases when they choose financing through their local dealerships, the CFPB is pressuring lenders to eliminate the dealer discounts that are a primary driver of these consumer savings.
"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 CFPB's efforts to eliminate or restrict dealer discounting have not included an analysis of the economic impact to consumers, and continue to be met with increasing scrutiny by Congress.
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," said Welch. "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."
Learn more at: nada.org/autofinance.