The Tennessee Court of Appeals has ruled that dealerships in the state are not required to disclose that they will receive a dealer reserve on their finance agreements.

A three-judge panel unanimously rejected a class-action lawsuit accusing Larry Hill Pontiac-Oldsmobile-GMC Inc. in Sevierville, Tenn., of violating state consumer protection and trade practices laws, reported Automotive News.

The dealership had no legal duty to tell Patrick Beaudreau that it would receive 2.25 percent of the 13.5 percent interest he was paying on his General Motors Acceptance Corp. loan, the court said.

As the first case of its kind in Tennessee, the Court of Appeals said its decision is consistent with rulings elsewhere, including California and Alabama.

"A reasonable consumer should be aware that a for-profit retailer, in arranging for financing for a consumer, would expect to receive some sort of remuneration for its efforts," said Judge Charles Susano Jr., according to Automotive News.

The court stated: "Regardless of whether GMAC was to receive all or only a portion of the stated interest of 13.5 percent, the fact remains that the plaintiff knew he was paying 13.5 percent to borrow the money.

"He was, at all times, free to reject GMAC financing and look elsewhere for a loan."