Pricing – Cash vs. Credit – Georgia Car Law Authority

Customer A wants to buy a car for cash. Customer B wants to buy the same car on credit. How much are you charging each customer for the car? The same amount. Changing prices depending on whether the customer is buying with cash or credit is illegal price discrimination. Watch this video for further explanation.

Below is a transcript of the video:

Now we’re going to talk about vehicle pricing. Federal law requires car prices to be the same, whether the customer is a cash customer or a credit customer. Obviously, a credit customer is going to pay interest so, over the course of a loan, they’re going to pay more, but the price of the vehicle must be the same. This is discovered usually through secret shoppers. A secret shopper will come in as a cash customer and the dealer says it’s $19,999.Pricing - Cash vs. Credit

Then the next day, a credit customer will come in and the dealer will say it’s $21,995 when the only distinguishing factor is credit versus cash. That is against the law. The federal law requires the cash price of the vehicle to be the same, regardless of whether a customer is a credit customer or a cash customer. Now, of course, credit customers require down payments and the down payments can change depending on the creditworthiness of the customer, but the actual price of the vehicle, what we would call cash price on the bill of sale, cannot change based solely on the fact that it’s a credit customer versus a cash customer.


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Pricing – Cash vs. Credit