Dealer Financing Continue to be Defended by Industry
In the midst of efforts to highlight the dealer-assisted financing positives to the Federal Trade Commission while regulators consider taking further consumer finance protection measures, the National Automobile Dealers Association, or NADA, seem to have an ally in the legal world.
Tom Hudson, a founding partner of the Hudson Cook law firm which provide the finance and auto industries with legal compliance services, announced that the consumer advocates campaigning for these extra protection measures may have appeared to forget the benefits that dealer financing can afford to consumers.
Hudson said, “The consumer advocates seem so fixated on eliminating dealer revenue from the F&I department that they are willing to ignore the fact that dealer financing is frequently less expensive than the alternatives and that it is always more convenient.”
He added, “They are particularly incensed that dealers have discretion in determining finance rates, and evidently will not be content until they convince the regulators to prohibit any such discretion.”
“And they assert these arguments despite the dearth of empirical evidence supporting them. If the Federal Trade Commission does what I expect it to do, it won’t buy into the consumer advocates’ arguments without such evidence, said Hudson.”
Hudson was just echoing much of what NADA emphasized in a recap of the final Motor Vehicle Dealer Roundtable sponsored by the FTC in Washington D.C. earlier this month.
NADA said that the dialogue probed into “alleged misrepresentations and other misconduct: in leasing and educating consumers, as well as businesses.
The roundtable also discussed “alleged abuses” by dealers which hurt consumers and “widespread dealer conduct” that although technically legal could have adverse ramifications for the consumers.