For Immediate Release:
Monday, Sept. 22, 2008, 12 p.m.
Jack Gillis, CFA (202) 737-0766
Patty Briotta, NAFCU (703) 522-4775 x291*
Angelo Gonzalez, CNC, (305) 642-3484 x114*
*Available for Spanish language interviews
Hispanic Americans Pay Higher Used Car Loan Rates
Hispanic America Saves Outlines Steps to Avoid Costly Loans
Washington, DC -- A Consumer Federation of America (CFA) analysis of the most
recent Federal Reserve Board Survey of Consumer Finances reveals that Latinos pay much
higher used car loan rates than do other Americans. Slightly more than half of all automobile
loans taken out by Latinos were for used cars.
On 2004 loans for used car purchases, Hispanic-Americans paid a typical (median) rate
of 9.0 percent compared to a typical rate of 7.5 percent for all borrowers. Moreover, a far higher
percentage of Latinos, than other Americans, were likely to pay used car loan rates of at least 15
percent -- 18.5 percent of Latino borrowers compared to only 9.2 percent of all Americans.
There were not, however, large disparities in typical loan rates for new cars -- 5.5 percent
for Hispanic-Americans vs. 5.0 percent for all Americans. And the percentage of these loans
over 15% for both groups was small and nearly the same -- 1.8 percent for Latinos and 2.2
percent for all Americans.
"One could speculate that recent immigrants with low incomes and little experience
negotiating low loan rates almost always purchase used cars," said Stephen Brobeck, Executive
Director of the Consumer Federation of America (CFA), which oversees the Hispanic America
Saves campaign. "That could help account for the loan rate gap for used car purchases, which
does not exist for new car purchases."
“We’ve seen recent immigrants struggle with high-interest car loans, and in the worst
cases it can decimate their finances. But at the same time, owning a car provides access to jo