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Car Dealers & The 'Mark-Up' Scam

CBS News

May 23, 2004

Every time Michelle Thompson gets behind the wheel of her used Honda, she gets angry, reminded of the car dealer she claims steered her into an almost 18 percent loan.

”I think they take advantage of minorities, lower class is what they probably deem us,” said Thompson.

Thompson has been working to pay off her car at $440 a month, she told CBS News Correspondent Sandra Hughes.

“It's like half my paycheck and it's a struggle now that I'm a homeowner. I have a three-year-old son. It's definitely a huge burden," Thompson said.

Thompson fell victim to an industry-wide practice called the "dealer mark-up" when she bought her car at a northern California dealership. The mark up happens when a buyer purchases a car and finances it at the dealership using the dealer's loan company instead of a bank.

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