It's probably fair to say that most car buyers know they don't have to pay the manufacturer's suggested retail price on a new car. We know the deal — the vehicle price is negotiable at dealerships where haggling is still the industry norm.

But for many borrowers, that same knowledge needs to carry over to the interest rate they pay to finance a vehicle. This is particularly true for blacks.

An analysis of the most recent Federal Reserve Board's Survey of Consumer Finances data, done on behalf of the Consumer Federation of America, found that in 2004, blacks paid much higher loan rates on new and used autos than whites.

On 2004 loans for new car purchases, blacks paid a median interest rate of 7 percent — compared with 5 percent for whites and 5.5 percent for Hispanics. On used car loans, blacks and Hispanics both received higher interest rates. The median rates for blacks and Hispanics were 9.5 percent and 9 percent, respectively; it was 7.5 percent for whites.

Additionally, CFA found that more blacks paid auto loan rates of at least 15 percent. For new car loans, 6 percent of black borrowers paid 15 percent or more, compared with just 1.7 percent for whites and 1.8 percent for Hispanics. On used-car loans, 27 percent of black borrowers and 18.5 percent of Hispanic borrowers paid 15 percent or more, compared with 9.2 percent of white borrowers, the analysis found.

For CFA, the findings suggest discrimination, but an industry representative challenged that conclusion. The data do "not contain ... most notably, the borrower's creditworthiness, and prevailing rates at the time the credit was issued," said David Hyatt of the National Automobile Dealers Association.

And yet expert research in 11 class-action lawsuits against major auto finance companies and banks found that blacks and Hispanics were consistently charged higher interest rates on their loans even when there was little difference in such factors as amount financed, term of loan and, most important, creditworthiness, said Stuart Rossman, director of litigation for the Boston-based National Consumer Law Center.

All the cases have been settled — the most recent in March — without the lenders acknowledging wrongdoing.

When a consumer asks the dealer to arrange financing, the loan is not made by the dealer. Instead, the dealer acts as a middleman, sending the consumer's credit application to a lender, which may include a bank or finance company owned by the automobile manufacturer. Taking into account that person's credit history and other information, a lender approves the finance application for a certain annual percentage rate known as the "buy rate."

Let's look at this buy rate in real dollars. Suppose the car you want to buy costs $28,000. Currently the national average interest rate on a 48-month new car loan is 6.9 percent, according to bankrate.com. At that rate over the life of the auto loan, you would pay about $4,100 in interest. If the rate is kicked up to 15 percent, the total interest would be $9,400.

Dealers defend markups as legitimate compensation for helping to arrange loans.

But there is a difference between a fair profit and gouging — and arbitrarily increasing a loan's interest rate based on skin color, national origin and yes, even naivete, is despicable.