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Dealers, Madigan meet over dealer financing

November 22, 2010
Dealers await a counterproposal from Illinois Attorney General Lisa Madigan, following discussions Feb. 27 on Madigan's push to compel dealers to reveal their margins on car loans. Area dealers and representatives met with Madigan to negotiate a common ground in Madigan's pursuit of legislation requiring dealers to disclose any compensation they get when they secure financing for their customers. Identical House and Senate bills, both which stalled, would force disclosure of the wholesale interest rate, or "buy rate," at which a finance company buys a sales contract from a dealership and the variable retail rate the store offers a customer. The CATA supports disclosures similar to those endorsed by the NADA, which would tell consumers that a dealership makes a profit on financing and that interest rates are negotiable. House Bill 4900 withered in committee. Any negotiation agreed to by Madigan and dealers would be introduced in Senate Bill 3148. Customers are free to secure financing from whatever source they wish. Dealers often can identify lenders for customers with poor credit ratings even after the customers could not. Dealers say they they are entitled to a profit for their service.