We wrote a couple days ago about interest rate discrimination by car dealers. Auto finance companies permit dealerships to "mark-up" the rates, and that often results in women and minorities paying higher interest rates.
Most car dealers do not want consumers to know that they regularly mark-up the interest rate on auto loans. Many banks and finance companies will approve a credit application at a "buy rate" but permit the dealership to charge a higher "contract rate." The bank will share the extra money that the consumer pays in interest. So, the consumer has a higher car payment, and the car dealership makes a higher profit. This is one of the reasons that car dealers are so eager to handle the financing when selling a car.
Car dealers like to brag about their relationships with multiple banks and finance companies, and they often imply that these connections help consumers get low interest rates. But, many consumers would be surprised to learn that car dealers frequently mark-up the interest rates. In many deals, the dealership makes more money by marking up the interest rate than they profit from the sale itself.