AFSA Members to Include More Disclosures In Vehicle Financing Contracts

WASHINGTON, Feb. 12, 2004 -- A trade association for many of the nation's auto creditors today announced that its members will add a new statement to their vehicle financing contracts that tells consumers they may negotiate the Annual Percentage Rate (APR) when they buy a car or light truck from a dealership.

Under a new voluntary standard adopted by the American Financial Services Association (AFSA), members will also include a statement in their financing contracts that says dealerships may retain a part of the finance charge.

"The standard is part of our ongoing efforts to provide consumers with information to allow them to make good choices about their vehicle financing," said Randy Lively, AFSA president and chief executive officer.

While the standard is effective immediately, AFSA will allow time for its members to notify independent form producers with whom they do business and/or redesign their own forms and training documents, train employees and take other necessary steps for compliance. The association expects most of its members to have incorporated the new standard within the next six months.

Last year, the AFSA Education Foundation (www.afsaef.org), an affiliate of AFSA, and NADA produced a consumer brochure, Understanding Vehicle Financing, in cooperation with the Federal Trade Commission. The brochure, which covers fundamentals about the dealership financing process, is available in both English and Spanish.

Founded in 1916 and based in Washington, D.C., 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.