Trade Groups Support Expanded Disclosures for Vehicle Financing

WASHINGTON, Feb. 12, 2004 -- Continuing their efforts to increase consumer understanding of vehicle financing, three trade associations representing many of the nation's auto finance companies and financial institutions and most of the nation's auto dealerships today announced their support for a voluntary disclosure that tells consumers they may be able to negotiate the Annual Percentage Rate (APR) when they buy a car from a dealership.

The American Financial Services Association (AFSA), the Consumer Bankers Association (CBA) and the National Automobile Dealers Association (NADA) also announced their support for a disclosure that the dealership may receive a part of the finance charge or other compensation for providing the financing.

Last year, the AFSA Education Foundation (www.afsaef.org), an affiliate of AFSA, and NADA produced a consumer brochure, Understanding Vehicle Financing (www.afsaef.org/images/vehicle-financing.pdf) in cooperation with the Federal Trade Commission. The brochure, which covers fundamentals about the dealership financing process, provides a glossary of common vehicle financing terms and a worksheet to allow consumers to comparison shop among different creditors. To date, creditors and dealerships have distributed Understanding Vehicle Financing throughout the country. The brochure is also available in Spanish (www.afsaef.org/images/vehiclefinspanish.pdf).

"Our action comes from the belief that these disclosures, in conjunction with the brochure distributed last year, will benefit consumers and creditors alike," said Randy Lively, AFSA president and chief executive officer. "It's important that consumers have information that will benefit them in the vehicle buying process."

"We want to help ensure that consumers are satisfied with the auto buying and financing process," said Joe Belew, president of CBA. "This disclosure will help promote that and is part of our broader effort to promote financial literacy."

"Our goal is to continue to build consumer trust," said NADA chairman Charley Smith. "And to do so, we must, as an industry, recognize the need for greater transparency in dealer-assisted financing."

Founded in 1916 and based in Washington, D.C., the American Financial Services Association (AFSA) is a national trade association for market-funded financial services firms that provide credit to consumers and small businesses. The AFSA Education Foundation heightens consumers' awareness of personal financial responsibility.

The Consumer Bankers Association (CBA), based in Arlington, VA, is the recognized voice on retail banking issues in the nation's capital. Member institutions are the leaders in consumer financial services, including auto finance, home equity lending, card products, education loans, small business services, community development, investments, deposits and delivery. CBA members include most of the nation's largest bank holding companies as well as regional and super community banks that collectively hold two-thirds of the industry's total assets.

The National Automobile Dealers Association (NADA), founded in 1917 and based in McLean, VA, represents more than 20,000 new car and truck dealers, with more than 43,000 separate franchises, both domestic and import.