Is Toyota Discriminating? A $21.9 Million Settlement Says So (Kind Of)

Lawsuit

Right, so this happened.

So it turns out that Toyota is in a bit of legal trouble. Again. Only this time a settlement has already been worked out. Here’s what happened: Toyota’s auto-loan division, Toyota Motor Credit Corporation, has agreed to pay a $21.9 million settlement to thousands of black, Pacific Islander, and Asian customers. The reason? The US Consumer Financial Protection Bureau (CFPB) and the Department of Justice determined these minority groups were charge higher car loan interest rates than white borrowers, despite having similar credit.

According to those US agencies and The Atlantic, beginning in 2011 up until this year minority borrowers were charged between $100 and $200 more than white Toyota customers. Turns out this practice even has a name, "dealer markup." That’s how some Toyota dealers managed to get away with the unfair pricing. Dealer markups, as most of us know, is a way for dealers to make more money in various ways. But in this case, it worked like this: when a buyer opted to finance through a dealership’s in-house financing department, their credit score and other factors helped determine their loan rate, which is nothing unusual. But here’s where things began to stink:

You Might Also Like
Will Mainstream Manufacturers Win The EV Wars?
Will Mainstream Manufacturers Win The EV Wars?
The Lexus RC F Is A Used Bargain With A Throaty V8
The Lexus RC F Is A Used Bargain With A Throaty V8

Toyota allows its dealers to increase those rates by up to 2.5 percent, which is pure profit. What the CFPB’s investigation found was when dealers decided which customers to charge more, minorities, regardless of credit, often paid a higher rate. In addition to the financial settlement, Toyota has also agreed to cap the markup to 1.25 percent for five-year loans, and 1 percent for longer term loans. However, those penalties won’t completely end the discrimination, only limit it. For its part, Toyota Motor Credit Corporation has denied any wrongdoing.

Fake Lamborghini Murcielago SV Reverse-Engineered By Iran

The Chinese couldn’t have done it better.

Hennessey Trackhawk Is World's Quickest SUV

That's what a thousand horsepower will do for ya.

5 Things You Need To Know About The 2019 BMW X5

After driving the car for the first time, here are our key takeaways.

Watch The BMW M2 Competition Lap The Ring In 7:52

That was supercar territory not long ago.

Kim Jong-un Gets Classy With New Ride

So much for sanctions.

Drifting A 1,000-HP Corvette On Mountain Roads Takes Some Serious Skill

Thought drifting the entire Nurburgring was challenging? Try it in a 1,000-hp Corvette on a mountain road with no safety rails.

Hennessey Heritage Edition Ford Truck Makes More Power Than Anything You’ve Got

This crazy beast is even more powerful than the Ford GT.

Ford Imagines A Future With No Traffic Lights

Stopping at junctions could be a thing of the past in the future.

One-Off Ferrari 330GT Speciale Is A 50-Year-Old Dream Come True

This stunning coachbuilding project is a tribute to legendary Italian designer Giovanni Michelotti.

What's Hot