Honda Racial Bias: Carmaker To Pay $24 Million To Settle Racial Discrimination Claim

Jul 15, 2015 02:21 PM EDT | Jelani James


Honda will pay $24 million to settle the U.S. government's allegations that it discriminated against black, Hispanic and Asian car buyers by overcharging them.

The government claimed in a lawsuit that Honda's practices allowed car dealers "broad discretion" to increase interest rates on company-issued loans which resulted in higher prices for targeted minorities, PIX11's Pittsuburgh associate reported.

The investigation found that the increases amounted to as much as $250 more over the life of a loan and that thousands of minority customers were subjected to the price increase, according to NBC News.

In a statement, Honda said it "strongly opposes any form of discrimination, and we expect our dealers to uphold this principle as well. We firmly believe that our lending practices have been fair and transparent." 

The US Consumer Financial Protection Bureau and Department of Justice said that the American Honda Finance Corp would limit the size of dealer markups to reduce the potential for discrimination, according to BBC.

Because loan applications don't record the race or national origin of Honda's customers, the government estimated the number of minority applicants based on where they lived and the ethnic origins of their names. 

Honda, while agreeing to the $24 million settlement, said today that they disagreed with the governments methodology but "we nonetheless share a fundamental agreement in the importance of fair lending."

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