MIDLOTHIAN, Va., April 24, 2019 /PRNewswire/ -- Outside Financial today released the latest results for the Outside Financial Markup Index, the leading measure of dealership loan markups paid by consumers for new cars.
Data released today for 2018 show that consumers paid an average of $1,791 in undisclosed fees and markups, a 5% increase from 2017 and a 71% increase since 2010.
Analysis & Commentary
"This is why consumers must shop around for financing before they visit the dealership, and why car loan refinancing can help so much. As car prices have become more transparent, dealers have increasingly relied on loan markups to grow profitability. We calculate that for the first time ever, in November 2018, auto dealers made more from financing new cars than from selling them," said Sonia Steinway, Outside Financial's president.
How can this happen? "More than two-thirds of consumers don't realize dealers can mark up their interest rates. Because markups on auto loans and ancillary products can vary greatly, even for the same car or product at the same dealership, the consumer is vulnerable to the extent they don't know their options. That's why we empower our customers to make the right financing choices," said Steinway.
"With US light vehicle sales at over 17 million for 2018, over 5 million new car loans were arranged at car dealerships last year. By shopping for car loan packages before they go to the dealership to buy their cars, consumers could have saved $1,000 in hidden fees and markups on each of these loans, or over $5 billion in aggregate. At Outside, we hope to bring the same level of transparency to auto loans that consumers now have with car prices. Step one is to bring your auto loan from 'outside' the dealership," said Jon Friedland, CEO of Outside Financial.
About the Outside Financial Markup Index
The Outside Financial Markup Index analyzes public data from the Securities and Exchange Commission, the Federal Reserve Bank, the Consumer Financial Protection Bureau, the National Automobile Dealers Association, DealerStrong, and Auto Finance News, combined with interviews of automobile finance executives. The Index details consumer costs on auto loans arranged by dealerships for new car purchases. It is updated monthly and is subject to minor revisions for up to 4 months. The Index is available at https://www.outsidefinancial.com/markup-index.
About Outside Financial
Outside Financial enables car buyers and owners to understand their financing options and connect to the right lender for them. Outside Financial brings education and choice to car buyers and refinancers, arming them with information and options to make financing easier, while bringing pre-qualified and motivated consumers to dealers and lenders. The company partners with leading financial institutions and VSC and GAP providers that have similar consumer-first values to ensure a quality experience for car buyers for the life of their loans. For more information, visit www.OutsideFinancial.com.
SOURCE Outside Financial, LLC