From the October-01, 2008 issue of Credit Union Times Magazine • Subscribe!
Research Shows Gap in Used Car Interest Rates for Latinos
WASHINGTON -- Last week, the Consumer Federation of American and its Hispanic America Saves initiative announced research analysis that showed a disparity in the interest rates on used car loans for Hispanic borrowers and rates received by borrowers from the general population.<p>The analysis examined loans for used car purchases in 2004 and showed that Latinos paid a median interest rate on used car loans of 9% while the average interest rate for all Americans on used car loans was 7.5%. For new car loans there was little difference between the interest rates among Latinos and among all Americans. For new car loans Latinos had an average interest rate of 5.5% and all Americans have an average interest rate of 5%.</p><p>Additionally, 18.5% of Latinos were likely to pay a used car loan rate of at least 15% where as only 9.2% of all Americans were likely to pay a loan rate that high.</p><p>Angelo Gonzalez, Economic Independence project director from the Cuban American National Council, said that a possible explanation for the gap in interest rates is that there is a significant gap between well established Latino's in American and new immigrants. He said that new immigrants are more likely to purchase used cars and the sellers are taking advantage of their inexperience. Many new immigrants are not aware that they can negotiate a loan off-site from a dealership and are being taking advantage of through on-site dealer financing.</p><p> </p><p> </p>