We've Come a Long Way, Sisters

We’ve Come a Long Way, Sisters

Equity in Auto Finance: Leveling the Gender Playing Field, Past and Future

If there had been Cadillac Escalades in Cleopatra’s time, no doubt she would have owned one. In ancient Egypt, women had equal financial rights with men.

“Egyptian women were able to acquire, to own and to dispose of property (both real and personal) in their own name,” says historian Janet Johnson. “They could enter into contracts in their own name, initiate civil court cases and could, likewise, be sued, and they could serve as witnesses in court cases and on juries.”¹

However, after that enlightened time, women were plunged into the dark ages when it came to property rights and the ability to access financing.

It wasn’t until the passage of the Equal Credit Opportunity Act (ECOA) in the United States in 1974 that women were able to get credit cards in their own name. Nor were they able, until then, to buy a car without a husband, or a man, co-signing on the loan.

How did women go from having it all in ancient Egypt to literally, for centuries, having no legal property rights at all?

A long path to change

Before the U.S. even became a nation, the American colonies adopted British law that stated that women had no legal standing of their own outside of their husbands, and anything they owned became the property of their husbands when they married.

It wasn’t until 1839 that Mississippi became the first state to allow women to legally own property in their own names.

Most everywhere else in the country, however, a woman’s husband had control over any real estate or property that she owned. Single women were legally allowed to own property, but when they married, control of that property was transferred to the husband. In addition, women could not acquire property when married.

These laws slowly began to change in 1848 when New York passed the Married Women’s Property Act that allowed married women to own property.

In 1862 California made the first step toward achieving full rights to banking services for women. The state passed a law that created the savings and loan industry in California. The law also allowed a woman to control any funds she deposited in her own name.

During the same year, San Francisco Savings Union made the first loan to a woman in the U.S.

The car loan officially originated in 1919, when General Motors established the General Motors Acceptance Corporation, or GMAC. GMAC was formed in response to Americans’ growing demand for automobiles after World War I.

Even though women still couldn’t finance vehicles on their own at that point, manufacturers were paying attention to them as consumers. Ads changed from pre-World War I descriptions of mechanical parts and small sketches of cars to larger color pictures that minimized the technology and featured women as passengers and drivers.

However, it still wasn’t until the 1960s that women began to have full access to the banking products and freedom to purchase their own vehicles.

Some progress

Since the passage of the ECOA in 1974, women in the U.S. have progressed toward building their own credit histories. According to Experian, average credit scores — one criterion used in evaluating loans — for women and men are nearly identical. Women now also have as many personal loans, student loans, auto loans and home equity lines of credit as men.

Where do we go from here?

Pay equity will help shrink the income disparity between men and women, allowing women easier access to more affordable credit.

Increasing financial literacy for women is also key to helping women become more knowledgeable about financial products. Some things to keep an eye on:

• Do we teach girls to save money, while teaching boys to build wealth?
• How do we teach girls about finances so they can spot disparity traps and handle money matters? Gone are the days when only men handle household finances.
• Just 20% of female breadwinners said they were "very well prepared" to make wise financial decisions versus 45% of their male peers.

Empowering women’s financial prowess is not only the right thing to do, it’s profitable.

• Women make 65% of new car purchase decisions. (Source: Yankelovich Monitor, M2W Conference)
• Women spend more than $200 billion on new cars and mechanical servicing of vehicles each year. (Source: She-conomy)
• 45% of all light trucks and SUVs are purchased by women. (Source: Women-Drivers.com, 2010)²

Cadillac, GM and GM Financial/Cadillac Financial are working toward equity in auto financing for women. It’s in line with our ongoing commitment to equity and justice.

One of the ways we do that is by supporting KEYS^®, which aims to improve financial literacy in communities across the U.S. by delivering critically important credit, budgeting and basic financial education to help drive upward mobility.

“For our part, I’m proud that KEYS^®, which offers education on building credit, better managing debt, demystifying the car-buying process and much more, is helping women do just that,” said Susan Sheffield, GM Financial's Chief Financial Officer. “To continue to close the equity gaps in financial acumen and empowerment, it’s going to take all of us chipping away at these disparities – non-profits, the private sector and civic and community groups alike. We’ve made some significant progress here, but there’s still opportunity ahead.”

GM’s “Everybody In” campaign goes beyond just the purchase of cars to embody the company’s push for equity and inclusion.

“At General Motors, we are committed to true accountability in diversity, equity and inclusion and are committed to doing our part to make our company and our world a better place,” said General Motors CEO Mary Barra on accepting the 2021 Excellence in Gender and Diversity CEO Award from the Women Business Collective.

Mary, who has been GM’s CEO since 2014, is the first woman to lead one of the big three U.S. automakers. In 2022, she was No. 4 on Forbes’ list of The World’s 100 Most Powerful Women.

¹Women’s Legal Rights in Ancient Egypt, Janet H. Johnson, Fathom Archive 

²GirlPowerMarketing

By Julie Powell, Cadillac Financial

Julie Powell is a published author and former journalist. She grew up in a Chevy station wagon and has driven GM cars most of her life, including a pink Cadillac! She can’t wait for the upcoming GM EVs for her next ride. When not writing about Mode, she’s reading books on politics or watching Turner Classic Movies with her three dachshunds.