Nobody Is Auditing Your Car Loan Markup Now. Ask for the Buy Rate.

If you’re financing a car at the dealership this fall, the rate they quote you is a retail price. Your credit probably earned a lower one, and nobody has to show it to you. As of this month there’s one less federal referee watching what gets stacked on top.

On August 7 the FTC said it will stop bringing “disparate impact” claims, the ones built on statistics showing a practice hit one group harder without proof that anybody meant it to. The vote was 2-0. “Disparate-impact claims are nearly impossible to square with our colorblind Constitution,” said Chairman Andrew Ferguson.

The Commission also went back into three of its own closed auto cases, against Napleton, Passport Auto Group, and a man formerly with Coulter Motor Company, and modified compliance terms those defendants had already agreed to.

The original Napleton case is the clearest published picture of how car financing works. Dealership employees had “wide latitude to increase the cost of a consumer’s loan by increasing the amount paid in interest.” Black customers at those stores were charged about $190 more in interest and $99 more for the same add-ons than similar white customers. Napleton paid $10 million, $9.95 million of it back to buyers, and agreed to run a fair lending program that capped how far it could mark up interest.

The FTC loosened exactly that kind of statistical testing. It didn’t publish a line-by-line list of what came out of each order.

Here’s what they don’t tell you at the finance desk. The lender quotes the dealer a “buy rate,” the rate your credit actually earned. The dealer is usually free to sell you a higher one and keep part of the spread. That’s legal and standard. It never shows up as a line item, because it isn’t one. It’s baked into the APR.

One percentage point of markup on a $30,000 loan over 60 months costs you about $855 in extra interest. Two points costs roughly double that. Nothing about August 7 made that number bigger or smaller. What changed is who’s checking it.

You are.

Get a preapproval from a credit union or your own bank before you walk onto the lot. It sets a ceiling and it costs nothing. Bring the paper.

Then ask the finance manager one question: “What’s the buy rate on this?” Plenty will dodge it. Some will drop the markup rather than have the conversation, which tells you what was in there. Either way, compare their offer against your preapproval on APR, not on the monthly payment. Payment shopping is how a longer term gets sold to you as a discount. Run both numbers through our loan calculator before you sign.

A lot didn’t change. The $10 million judgment and the other two stand, and buyers already refunded keep their money. The FTC says it will keep bringing intentional-discrimination cases under the Equal Credit Opportunity Act, and its junk-fee and deception work is untouched. State fair lending laws aren’t preempted, and dealer groups are being told outright that several states are drafting their own versions. The federal statistical net shrank this month. The state one didn’t. If you think you were quoted a worse rate than someone with your credit profile, your state attorney general is the faster door now. Our earlier piece on what the CFPB’s fair lending rewrite left standing has the other routes.

How Candid Yak makes money. Some of the products we write about pay us if you apply or sign up through our links. That never changes our verdict, our rankings, or the numbers in this article. We call a bad deal a bad deal whether it pays us or not. Some brands shown in our comparison tools are placeholder examples while we finalize partner agreements, and we label them as such.