Marketplace – National Public Radio

CHERYL GLASER, anchor: So what’s on your agenda this weekend? A cookout? Fireworks? How about shopping for a new car? The auto industry has made summer sales as much a part of July Fourth as the traditional barbecue. Commentator and consumer activist Jamie Court says if we really want to honor the spirit of 1776, we should stick to the hot dogs and drive right past the car lots.

JAMIE COURT: Motherhood, apple pie, Chevrolet. Hogwash! This Fourth of July, declare your independence: Don’t deal with car dealers.

First, those super summer sales really aren’t. Turns out car dealers mark up auto finance charges by an extra $1 billion a year according to a report from the Consumer Federation of America. The scam is: You haggle down the price of a car, but for the loan, you’re charged more in interest than you should be. The lender then pays a kickback to the dealer.

Second, among the truths Americans still hold to be self-evident is that all people are created equal, but it’s not self-evident to car dealers. African Americans paid the dealer’s markup almost twice as often as whites at GMAC, the nation’s second largest auto lender. Ford Motor Credit Company charged Latino borrowers more than 250 bucks extra in additional finance costs per loan.

And third, the very freedoms the colonists fought for disappear on a car lot, as they do in much of corporate America. The Declaration of Independence condemns King George for depriving us in many cases of the benefit of trial by jury. Car dealers routinely force buyers to sign away their Seventh Amendment right to trial in favor of binding arbitration to settle any dispute. California car dealers raised nearly $5 million for ballot initiative Prop 64 this coming November that seeks to gut the state’s consumer protection law.

July Fourth is the day we should honor the Declaration’s cry against ‘having erected a multitude of new offices and sent hither swarms of officers to harass our people and eat out their substance.’ If that doesn’t describe car dealers, what does? In Los Angeles, this is Jamie Court for MARKETPLACE.

GLASER: Consumer activist Jamie Court is author of “Corporateering.”