Auto Dealer Loan Intermediation : Consumer Behavior and Competitive Effects

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Auto Dealer Loan Intermediation : Consumer Behavior and Competitive Effects

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Grunewald, Andreas / National Bureau of Economic Research

This paper studies the intermediation of auto loans through auto dealers using new and comprehensive administrative data. The arrangements between auto dealers and lenders incentivize dealers to increase loan prices. We leverage details of the corresponding contracts to demonstrate that many consumers are less responsive to finance charges than to vehicle charges. Taking this behavior into account, we estimate an equilibrium model of dealer price setting and lender competition. We explore counterfactuals where dealers have no discretion to price loans and final rates are set by lenders instead. We find large gains in consumer surplus from such a policy

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Title :

Auto Dealer Loan Intermediation : Consumer Behavior and Competitive Effects

Contributors:

Grunewald, Andreas (author) / Lanning, Jonathan A. / Low, David C. / Salz, Tobias / National Bureau of Economic Research

Published in:

NBER working paper series ; no. w28136

Publication date :

2020

Size :

1 Online-Ressource

Remarks:

illustrations (black and white)
Campusweiter Zugriff (Universität Hannover) - Vervielfältigungen (z.B. Kopien, Downloads) sind nur von einzelnen Kapiteln oder Seiten und nur zum eigenen wissenschaftlichen Gebrauch erlaubt. Keine Weitergabe an Dritte. Kein systematisches Downloaden durch Robots.

DOI :

https://doi.org/10.3386/w28136

Type of media :

Book

Type of material :

Electronic Resource

Language :

English