Predatory car loans hard to avoid in Charlotte, NC

The U.S. CFPB recently stated that “We also see evidence that some consumers may be getting priced out of the current [auto loan] market. Our response to the CFPB:

“This is particularly concerning given the realities that owning a car is the price of admission to the economy and society in much of America. Financing the purchase of a car was already a minefield for consumers and appears to only be getting worse.”

Over at the Charlotte (NC) Observer, Hannah Lang has a story on how hard it is for lower-income consumers to avoid “Buy-Here-Pay-Here” dealers and other predatory car sales lots. I warned her that BHPH car lots, in particular,  count on your failure to pay, so they can repossess and sell the same car again and again:

“They sell you the car, but they don’t expect you to pay it off.” said Ed Mierzwinski, senior director of the federal consumer program at the Public Interest Research Group. “They’re not trying to help you, they’re trying to simply maintain their revenue stream.”

BHPH dealers self-finance, but other predatory dealers rely on a number of add-on gimmicks and other tricks to increase the size of your car loan, then steer lower income customers to the highest-priced finance company that offers them, not you, the best deal.

But, as I pointed out, just as in Charlotte,

“In most parts of the country, you need a car to get to work even if you’re poor,” he said. “You’re stuck, because in our transportation (system), most of the (public) money goes into roads and not public transit.”

We’re working with other consumer groups on proposed FTC car regulations. Also, read our report, Driving Into Debt.