With interest rates for new-vehicle loans at a pre-recession low, car buyers took out larger loans in the third quarter, according to a new report from Experian Automotive. Specifically, new-car interest rates fell to 4.27%, while the average amount financed reached its highest level since pre-recession 2008 ― $26,719, up from $25,963 in 3Q12.
Quarter to quarter, average loan terms ticked up one month to 65 months, which translated to a $458 average monthly car payment, relatively…Continue
Added by Cody Lyon on December 5, 2013 at 12:21pm — No Comments
The Filene Research Institute is gearing up to test the National Credit Union Foundation’s auto loan program for low-income borrowers, according to a recent article from the Credit Union Times. The program rewards consumers for on-time payments, rather than penalizing them for late payments.
Testing of NCUF’s product will…
Incentives for car-buying consumers should rise modestly in the near term, but they won't go back to the destructive levels seen in the pre-recession days, according to a new report from the National Automobile Dealers Association.
In years past, incentives helped grow new-car sales levels ― but they also contributed to lower used-vehicle values. By 2004, used vehicles were a commodity, with prices down significantly, according to the NADA’s Incentive Analysis and Impact report. That…Continue
Added by Cody Lyon on December 3, 2013 at 11:59am — No Comments
CarFinance Capital LLC said today it completed its second rated asset-backed securitization ― a $303.8 million transaction that closed Oct. 24. The notes were assigned ratings by Standard & Poor's Ratings Services, Moody's Investor Services, and Kroll Bond Rating Agency.
"Our second securitization reflects the continuing strength of our business, management team, asset quality, and capital position, and further validates our mission of providing dealers and consumers a more…Continue
Added by Cody Lyon on December 3, 2013 at 11:07am — No Comments
Added by Andrew Katz on December 2, 2013 at 11:06am — No Comments
Another day, another letter from a legislator to the Consumer Financial Protection Bureau.
Sen. Max Baucus (D-Mon) is the latest to get in on this trend, writing last week to the Bureau about issues facing auto dealers in his home state. He says he stands “with auto dealers in Montana in supporting reasonable and effective policies to protect consumers from unlawful lending practices and discrimination.”
He also asks for “greater transparency” from the CFPB.
A letter was…
Added by Benjamin M. Geier on November 20, 2013 at 4:00pm — No Comments
Ally Financial Inc. said Wednesday it completed the repurchase of all outstanding shares of the "mandatorily" convertible preferred securities held by the U.S. Department of the Treasury and eliminated the share adjustment provision.
Specifically, Ally has repaid more than 70% of the investment to date, including the $5.9 billion payment today. In total, Ally has repaid $12.3 billion on an…Continue
Added by Cody Lyon on November 20, 2013 at 4:00pm — No Comments
Exeter has been approved to receive a $2.3 million tax break in the State of Utah.
Exeter will receive the tax incentive if it opens a new facility in the state, according to the Utah Governor’s Office of Economic Development. The incentive requires that Exeter meets Utah guidelines called Economic Development Tax Increment Financing.
As part of this initiative, the company has not picked a…Continue
Added by Cody Lyon on November 20, 2013 at 3:00pm — No Comments
Added by Andrew Katz on November 20, 2013 at 11:00am — No Comments
October's auto-loan default rate was 1.14%. That's one basis point lower than the September rate of 1.15% and the same as October 2012 which also stood at 1.14% according to S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices.
The comprehensive measure of changes in key consumer credit defaults, including bank cards, mortgages and auto loans, showed stability during the past month. The overall national composite was 1.38% in October- the…Continue
Added by Cody Lyon on November 19, 2013 at 1:00pm — No Comments
The threat of higher repossession volume looms as lenders extend loan terms to make monthly vehicle payments more affordable to consumers, said experts at the Used Car Week conference in San Diego last week.
The average repo rate among finance companies increased 54.4% in the third quarter, though it remained below 1%, according to fresh data from Experian Auto. Specifically, the repo rate was 0.62% last quarter, compared with 0.40% in 3Q12.
When a vehicle is sold multiple…Continue
Grits. Country music. Auto loans?
A USA Today article notes the ten cities where customers have the most auto loan debt, six of them are in the south, led by Shreveport, La.
The data came from personal finance site Manilla.com
Shreveport loan balances are at $18,603. Other cities on the list include number three Houston, Tex. at $17,281 and number nine Las Vegas at $16,257.…
Added by Benjamin M. Geier on November 18, 2013 at 2:00pm — No Comments
The Federal Reserve has approved Ally Financial Inc.’s plan to repay a big part of its government bailout.
Ally said Friday the Board of Governors at the Federal Reserve didn't object to the company's revised Comprehensive Capital Analysis and Review, or CCAR plan, which was resubmitted in September.
Acceptance of the CCAR plan satisfies a key closing condition related to the previously announced private placement of Ally common stock, as well as the repurchase of all the…Continue
Added by Cody Lyon on November 18, 2013 at 9:59am — No Comments
SAN DIEGO ― The clouds of uncertainty surrounding CFPB regulations over the auto finance industry remained grey ― despite all that bright sun at the Used Car Summit here this week.
Panel after worried panel warned attendees to be ready while offering up compliance tips that some say could end up reshaping the sector. The biggest takeaway, once again: Gather, document, and bank your data.
To gain insight, I sat down with Mike Thurman, an attorney with Loeb & Loeb, a firm…Continue
Disparate impact and dealer compensation were at the crux of the debate at yesterday's Consumer Financial Protection Bureau forum on auto finance.
CFPB Director Richard Cordray kicked off the event, reiterating that lenders must police their dealers to ensure compliance with fair lending regulations.
Industry representatives called out regulators for using unproven proxy methodology to determine biased lending, and argued that the shift to a flat-fee dealer compensation…Continue
Added by Marcie Belles on November 15, 2013 at 12:59pm — No Comments
Richard Cordray, director of the Consumer Financial Protection Bureau, faced a grilling yesterday as he answered to the Senate Banking Committee on issues including auto finance, a sector he called “red hot.”
Cordray had a lively back and forth with Sen. Jerry Moran (R-Kan.), who was part of the group of senators who wrote to Cordray last month asking for clarification on proxy methodology. In yesterday’s hearing, Moran asked if the bureau has done “specific analysis on the data…
Added by Benjamin M. Geier on November 13, 2013 at 1:00pm — No Comments
CFPB Director Richard Cordray will speak before the Senate Committee on Banking, Housing and Urban Development later today in his fourth semi-annual report to the group of lawmakers. The hearing is set for 2:30 p.m. Eastern Time.
On the prepared remarks shared this morning, Cordray doesn’t get specific about much regarding auto loans,…
Bank customers are increasingly looking online ― not at branches ― for their auto loans.
That was the upshot from Accenture research released today. Specifically, online sales of auto loans almost doubled, while traditional bank branch-sales dropped nearly 10%, according to the survey of 2,001 retail banking customers nationwide.
Auto loans were but one component of overall banking products that Accenture said showed double-digit growth year-over-year, while sales of the same…Continue
The press ― and the government ― have stepped up scrutiny of yo-yo financing.
WMC-TV, a Memphis, Tenn.-based NBC affiliate, posted a TV report and article about the practice last week. A Washington, D.C., Fox affiliate also posted a story recently.…
Added by Benjamin M. Geier on November 11, 2013 at 2:30pm — No Comments