BATON ROUGE, La. – Beginning this month, Louisiana becomes the first state to limit the amount dealers can raise interest rates on vehicle loans above the wholesale rates they get from lenders. In June, the Louisiana legislature passed a law capping interest rate markups at three percentage points. The law also requires dealers to tell customers that dealerships may profit from retail rates on vehicle loans. Other states have considered enacting similar legislation, but as yet have been unsuccessful. California dealers, for example, are fighting proposed legislation that would cap interest rate markups at two percent on vehicle loans of 60 months, and at one percent on longer loans.
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