1. Auto Lending Research Update Josh Frank and Delvin Davis July 10, 2009

2. Share of Dealership Profits

3. Prior Research Shows Race Influences Dealer Kickbacks

4. Industry Data on Add-on Penetration

5. Dealer Kickbacks in US and NC

6. The “Trust Tax” 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% Average Rate Excluding Factory Incentives Average Rate Trusted dealer to give a good rate or dealer said they were giving the "best" rate Other borrowers Note: Difference between groups for both rate significant at 5% level.

7. Prevalence of Yo-Yo Scams (on average rates 5 percentage points higher) 4.5% 11.1% 12.0% 25.0% 0% 5% 10% 15% 20% 25% 30% Total Population Credit Score Fair or Poor Income < $40,000 Income $25,000 or less Note: The difference in frequency between lower income and lower credit score groups and the rest of the population was statistically significant

8. Who gets Add-ons (sometimes sold as mandatory or without customer knowledge)

9. Most consumers unaware of Arbitration Yes, 10.6% No-shopped or negotiated to eliminate, 4.9% Don't Know, 67.8% No-never in agreement, 16.7%

10. Profit centers are not substitutes—instead there is “piling on”