Latinos pay higher used car interest rates than other Americans, a recent Federal Reserve Board survey reports. The survey shows that in 2004, Hispanic-Americans paid an average rate of 9%, compared to the overall used auto loan average of 7.5%. The survey also reported that Latinos were twice as likely to pay more than 15% interest on loans.
This isn’t an example of bank racism though, according to experts. Stephen Brobeck, executive director of the Consumer Federation of America, says that the sizable difference in used auto loan rates has more to do with income and experience negotiating low interest rates, and recent immigrants generally have less of both.
This big difference in rates didn’t carry over to new car loans though, where Hispanic-Americans had an average rate of 5.5% and all Americans had an average of 5%. Latinos had a smaller amount of high interest loans on new cars, just 1.8% versus the national average of 2.2%.