Latino Nissan Buyers Pay More, Study Says
Latinos in Florida who financed their car purchases through Nissan Motor Acceptance Corp. routinely paid higher interest rates than white consumers with similar credit histories, according to a study recently released as part of a class- action lawsuit.
The suit, filed in U.S. District Court in Nashville, alleges that the lending policies of Nissan Acceptance, a wholly owned subsidiary of Torrance-based Nissan North America Inc., discriminate against African American consumers.
Nissan officials deny the allegation.
To bolster their case, which is set to go to trial in February, the plaintiffs commissioned first a study of African American consumers nationwide, and last month added a study of Latinos. Researchers chose Latinos in Florida because it was easier to obtain race-based information from that state’s Department of Motor Vehicles, a source close to the case said.
The case involves the practice of allowing the dealer to charge consumers a markup over the interest rate charged by the manufacturer’s finance company based on credit scores.
A Nissan attorney described markups as “uniform industry practice that’s been going on for years.”
But the plaintiffs allege the effect is discriminatory.
Even when looking at customers with the best credit ratings, Latinos in Florida had a markup, on average, of $536 over the life of the loan.
That compared with a markup of $283 for white customers, according to the study by Mark A. Cohen, a professor of management at Vanderbilt University.
Among consumers with the worst credit ratings, Latinos paid $966 on average in markups, whereas whites paid $805, the study showed.
Alan Hunn, one of the Nissan attorneys handling the case, said the company “flatly denies the allegation.”
He said the study does not adequately control for a variety of factors including dealer incentives, the cost of the vehicle and even credit scores -- which can have a substantial effect on the final deal.
“Our contention is that if you control for all of these variables, you get the same credit treatment for all customers,” said Hunn, who acknowledged that the rate charged a consumer could be as much as three points higher than the rate charged by the financing arm.
Though the new study focuses on Latinos, Stuart Rossman, one of the attorneys for the plaintiffs, said the Tennessee case will not be amended to include Latino consumers because it is so close to its trial date.
But separately, Rosemary Shahan, president of Consumers for Auto Reliability and Safety, said she has had discussions, as recently as last week, with attorneys who plan to file a similar class-action suit in California based on experiences of Latino consumers here.
