Car loans in America: Bad carma | The Economist


It is borrowers who have more reason to worry.

A car loan is a complex transaction that hinges not just on the price of a car, but also on its trade-in value, extras such an extended guarantee or rust proofing, and most important, the interest rate. A dealer typically selects a quote from a bank or finance company via his computer and marks it up.

The higher the markup, the greater the payment he receives from the lender.

via Car loans in America: Bad carma | The Economist.

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