African-Americans face higher interest rates for car loans than other US borrowers, according to a consumer association.
Blacks paid a median rate of seven percent for loans on new cars compared to a typical rate of five percent for all American consumers in 2004, the Consumer Federation of America said on Monday based on an analysis of a federal survey.
And for used car loans, African-Americans paid 9.5 percent, compared to a rate of 7.5 percent for Americans in general, the association said in a statement.
"It's hard to believe that any differences in credit-worthiness explain all of these rate gaps," said Stephen Brobeck, executive director of the association.
The analysis also showed that a higher percentage of African-Americans were likely to pay car loan rates of at least 15 percent. In 2004, six percent of blacks paid the 15 percent rate compared to only two percent for all US consumers.
"A difference in credit risk can explain a part of it, but we believe that African-Americans get these rates just because they are African-American," Brobeck told AFP.
The percentage of black households with at least one auto loan is 32 percent, the same as the overall percent for all US households.
The study, using 2004 data from the Federal Reserve Bank, was based on a random sample of some 3,000 American households, the Consumer Federation said.
