SECU-CRL Car Buying Pact Protects Members
State Employees' Credit Union has teamed up with the Center for Responsible Lending to help arm members with knowledge before they step onto a car dealership’s lot.
Through the alliance, CRL will provide research data to the $27 billion SECU in Raleigh, N.C., on various costs associated with auto add-ons and financing, according to both partners.
Members will also learn what questions to ask and what details to look for in the fine print to avoid to unnecessary expenses and fees, which increase the overall cost of a car loan.
“As a member-owned, consumer-focused credit union, we are committed to helping members keep more of their hard earned money,” said Jimmy Goodrum, SECU senior vice president of member education and outreach.
The CRL said it has found that too many car loans are manipulated with overcharges, high interest rates and unnecessary add-on costs, said CRL Senior Vice President Chris Kukla.
“This is why we are looking forward to working with State Employees' Credit Union,” said Kukla. “Working together, we have the opportunity to turn research into action. Working together, we can help bring fair and responsible car lending practices to North Carolina.”
The CRL’s partnership with SECU comes on the heels of a report released by the Durham, N.C.-based nonprofit research and policy organization that found despite their attempts to negotiate pricing just as much, if not more than white consumers, Hispanic and black car buyers still received higher interest rates on loans financed through dealers.
African-Americans and Latinos were nearly twice as likely to be sold multiple add-on products as white Americans, according to the report. Add-on products such as various kinds of warranty and insurance coverage were sold at the dealership’s financing office, often with significant price markups.
Dealers sold African-Americans and Latinos multiple add-ons approximately 30% and 27% of the time, respectively, compared with 16% of the time for Caucasians, the findings noted. Multiple add-ons were also associated with greater chances of delinquency and therefore create a greater risk of repossession, the CRL report read.