Toyota knows how to make cars. The BBC’s Top Gear once did a three-part segment called “Killing a Toyota”, where they set out to test the durability of a Toyota Hilux. They set the truck on fire, drowned it, pummeled and crashed it multiple times before finally setting it on top of a building and blowing up said building. When they pulled the truck out of the rubble, with its battle scars and destroyed body, it still started. Toyotas are dependable and anyone who has been on the receiving side of unreliable cars understands the importance of making sure this vehicle can and will get you from point A to point B with no issues.
For many working-class families and people, reliability is crucial when they are on a strict budget and having a car that guarantees a safe passage to their workplace is one less headache in their life. Cars are expensive and can seem like an unattainable dream, so imagine the sense of accomplishment someone has after working extra and long hours, saving for months or years, and then, finally being able to walk into a dealership and put a down payment on a car. Now, imagine finding out years into making payments on that car that the dealership knowingly charged you a higher interest rate, based solely on the color of your skin.
That is what is currently happening with Toyota Motor Credit Corporation (TMCC.)
It came to light that any African-American, Asian, and Pacific-Islander who purchase a car from a Toyota dealership was subjected to much higher interests rates than non-Hispanic White customers, despite creditworthiness. What happened is that a lender like TMCC offers rates based on credit, but then Toyota dealerships will (and are allowed to) tack on extra interest rates, known as a dealer markup, where the average is about 2-5%. Investigators found that Black borrowers paid 0.27 percentage and Asian borrowers paid 0.18 percent more for loans than white Americans with similar loans and credit histories, paying between $100-$200 more than white customers with the same credit score
The Consumer Financial Protection Bureau and the U.S. Department of Justice brought the accusations to TMCC after starting an investigation in 2013. TMCC is neither confirming or denying these allegations, but has agreed to pay a settlement of $21.9 million to any customer that fits in those demographics that purchased a car from Toyota between January 1st, 2011 and August 1st, 2016.
TMCC has also agreed to limit the interest rates its dealers can mark up; now it’s only 1.25 percent for five-year loans, and 1 percent for loans with longer terms (it should be noted that this doesn’t eradicate the problem.)
If you think you might qualify, check out the website.This is time sensitive though as the last day for a buyer response is May 8th, 2018.