Special Interests or 29% Interest?

Barbara Rogers, who cares for disabled people, went to Airport Honda in Los Angeles to buy a van and was told she qualified for a loan at 16%.

No way, said the 60-year-old Carson resident. Her credit is good, so why the sky-high financing charge?

When the dealer came down to 10.24%, Rogers bought the van. Only later did she find out she had actually qualified for a loan at 6.74%. The higher rate, which will cost her an additional $3,272 over the course of her loan, is known as the dealer markup.

I’d gladly give you Airport Honda’s explanation, but one guy referred me to another guy, who didn’t bother calling back.

“The way I feel right now,” says Rogers, “I’d never buy another car from them.”

Yeah, but where will she buy a car?

The Consumer Federation of America says inflated financing is routine, costing car buyers up to $1 billion annually in the United States. The group says victims include one out of every four people who get their loans through the dealer, and the biggest targets by far are minorities.

Californians would get protected under the car buyer’s bill of rights introduced by Assemblywoman Cindy Montanez (D-San Fernando).

“I don’t want more people coming into my office with 28% and 29% interest on their loans, which is ridiculous, arbitrary and discriminatory,” says Montanez.

Her bill would also let buyers return a used car within three days of purchase if it’s a lemon.

Unfortunately for consumers, the Schwarzenegger administration is opposed to the bill.

Gov. Arnold Schwarzenegger, himself, isn’t personally out front on the issue, of course.

Instead, the DMV and Department of Finance have come out against the bill, which they claim would unnecessarily burden dealers and invite consumer complaints that drive up court costs.

In other words, too much justice can be disruptive.

When I asked where Schwarzenegger stands, a flack told me the governor doesn’t talk about bills until he vetoes or signs them. So all I can do is take him at his word.

Schwarzenegger keeps railing against special-interest politics, so I have to assume there is no connection between the administration’s opposition to the car buyer’s bill of rights and the fact that Team Schwarzenegger has pocketed roughly $1 million in donations from the auto industry.

I’m trying to block out the fact that one of Schwarzenegger’s first acts as governor was to fire the DMV director who had cracked down on auto-financing scams.

Then the governor paid a visit to Galpin Ford, whose owners donated $42,400 to the Schwarzenegger campaign. I was at the San Fernando Valley dealership when Big Boy took the stage and played car salesman, urging everyone to buy new wheels with the vehicle license tax refunds he was handing out.

The average savings on that tax was $158.

Frankly, I’d rather have the “action” governor go to the mat and save Barbara Rogers $3,272 in bloated finance charges. Or the $2,340 markup 20-year-old Suzanne Tejeda got stuck with when she bought a lemon of a used Honda in Concord.

Tejeda, a customer service rep at a bank, said it’s as if Schwarzenegger and the car dealers “are best friends.” They slip him wads of cash, she said, and they’d like him to protect their markup bonanza and keep limits on the lemon law.

“But this is not just about money, because it can cost people’s lives,” said Tejeda, explaining that her used car was in dangerously bad condition when she bought it. “I baby-sit my little nephews, and we could have gotten in a crash and been killed.”

When I checked with Schwarzenegger’s office, his chief flack wondered if I’d mention support of the car buyer’s bill by trial lawyers. It’s a fair point, because the huge lawyer lobby throws hundreds of thousands of dollars around, most of it to Democrats.

But Montanez has only received several thousand dollars from trial lawyers, who have lobbied in support of her bill but haven’t played a huge role.

“This is my bill, not a trial lawyer bill,” said Rosemary Shahan, the tireless crusader who runs Consumers for Auto Reliability and Safety.

She and Montanez were fielding a pitch late last week from auto dealers, who wondered if they’d drop the three-day buyer’s remorse part of the bill if the dealers promised to cap their financing markup at 2.5%.

Shahan said she’d rather keep the bill intact, which is understandable. In a poll this past spring, 80% of Californians supported the car buyer’s bill of rights after seeing arguments for and against.

Schwarzenegger, who casts himself as a man of the people, is going to have to make lots of shopping mall appearances to turn back that tide. He may also have a battle on his hands with Proposition 64, which would make it more difficult for consumers to sue car dealers, HMOs and other concerns for deceptive business practices.

In his only public comment on Proposition 64, Schwarzenegger tipped his hand by telling a chamber of commerce crowd he opposed “shakedown lawsuits.”

Look, I’m trying to give the man the benefit of the doubt on special interests. So don’t tell anyone this, but car dealers have led the fight for Proposition 64, pumping $4.8 million into the kitty.

“I have no doubt car dealers are counting on Schwarzenegger to be their salesman for Prop. 64,” says Jamie Court of the Foundation for Taxpayer and Consumer Rights.

Might be a tough sell. A new Field Poll says 41% are against Proposition 64 and only 21% in favor (the rest are undecided). But let’s not forget that Schwarzenegger talked Californians into borrowing $15 billion after campaigning against borrowing.

Besides, I saw him selling cars that day in the Valley. The man is a natural, I’m telling you.

Anyone interested in a used Hummer?

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The columnist can be reached at steve.lopez@ latimes.com, and you can read previous columns at www. latimes.com/lopez.