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New York Seeks Finance Markup Disclosure

March 29, 2004

DETROIT--Eliot Spitzer, New York's state attorney general, is expected to propose legislation forcing New York dealerships to disclose the profit they make on finance contracts, reported Automotive News.

Lobbyists who have seen the proposal said dealerships would be required to tell buyers the dollar amount they're making on loans instead of just the interest rate markup.

The New York Automobile Dealers Association supports requiring dealerships to disclose that buyers can negotiate interest rates and that dealerships may make a profit. But the association will fight any legislation for dollar disclosure.

Spitzer reached a settlement last week with an Albany, N.Y., dealership; his office had conducted a two-year investigation into the loan rates the dealership charged minority customers, said Automotive News. The settlement requires the dealership to disclose the wholesale interest rate it gets from lenders and the percentage rate of its loan markup. Spitzer will likely apply this settlement to other New York dealerships.

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