September 2008 Blog Posts (22)

Auto Loan Delinquency Rates Hit All-Time High

Yesterday, the proposed $700 billion federal bailout of the banking industry went down in (possibly temporary) flames. Tomorrow, car manufacturers are expected to report abysmal September sales.

The meat in this bad-news sandwich comes courtesy of Fitch Ratings, which noted today that losses on auto-loan securitizations are at an all-time high. Annualized net losses were 22% higher in August than July, and more than double the levels from a year ago. More details… Continue

Added by Mike Gibb on September 30, 2008 at 2:51pm — No Comments

Bailout Revival Lifts Stocks

Investors remained optimistic this morning that a new bailout package will be presented -- and passed -- by as early as Thursday. After mixed results from Asian and European markets overnight, the Dow Jones opened 200 points higher, and has remained at that level throughout the morning.

While details on Plan B (for Bailout) are still sketchy, the markets are expecting some good news in the near future.

Added by Mike Gibb on September 30, 2008 at 11:00am — No Comments

DOW DROPS OVER 700 POINTS AFTER CONGRESS FAILS TO PASS BAILOUT BILL

President Bush's plea this morning to urge Congress to pass the $700 billion bailout was not enough to win over the approval from the House of Representatives this afternoon. The House rejected the bailout plan by a vote of 228 to 205.

The failure of the bill sent the Dow Jones Industrials Average plunging. By day's end, the Dow lost more than 700 points, or more than 6.6%. Today was the largest drop of the Dow in history.

Many Republicans in the House voted down the plan… Continue

Added by JJ Hornblass on September 29, 2008 at 4:00pm — 2 Comments

The Chase-Mazda Hookup: A Golden Opportunity

If the deal inked today with Mazda Motor Corp. works out well, it may very well cement Chase Auto Finance’s role as a private-label finance provider.

Chase will take over Mazda financing operations from Ford Motor Credit on Oct. 1.

Chase Auto already serves as the captive for Subaru of America. In fact, Subaru ditched its own auto finance unit to work with Chase.

Private-label financing is something that Chase Auto Finance Chief Executive Marc Sheinbaum knows… Continue

Added by Marcie Belles on September 26, 2008 at 12:00am — No Comments

Report: GMAC Needs Bailout to Survive

If GMAC is banking on being included in the $700 billion bailout in order to survive, as this article suggests, then word tonight of a Congressional impasse can not be seen as a positive development.

Added by Mike Gibb on September 25, 2008 at 10:38pm — No Comments

Bill Heard Enterprises closes its doors Scottsdale, AZ., Sept. 24, 2008 - According to Automotive News' Chrissie Thompson, Bill Heard Enterprises, the country's top Chevrolet dealer group, is clo…

Bill Heard Enterprises closes its doors

Scottsdale, AZ., Sept. 24, 2008 - According to Automotive News' Chrissie Thompson, Bill Heard Enterprises, the country's top Chevrolet dealer group, is closing the doors at all of its 13 dealerships at the end of business today, according to a person with knowledge of the situation.

The company notified the stores' general managers at 2 p.m. today, the source said, who spoke anonymously because he was not authorized… Continue

Added by Steve Cortes on September 24, 2008 at 3:54pm — 6 Comments

Quote

'We are all born ignorant, but one must work hard to remain stupid.' ~Benjamin Franklin

Added by Sharon Brooks on September 24, 2008 at 7:33am — No Comments

Big Three Lobbyist Pushing for Auto Finance Inclusion in Rescue Plan

Big Three lobbyists are pushing for the inclusion of auto loan-backed securities in the Treasury Department's rescue plan, The Wall Street Journal is reporting this morning.

According to the Journal, "So far, Congress hasn't agreed to include auto-industry finance companies in the bill specifically. Companies are 'working to make it happen,' said the auto-industry lobbyist. 'The finance companies want… Continue

Added by JJ Hornblass on September 23, 2008 at 9:31am — 5 Comments

New Survey: Americans Lack Basic Knowledge of Their Auto Loan Interest Rate

Capital One Survey Reveals Majority of Americans Don't Know Auto

Loan Interest Rate, Unaware of Auto Loan Refinancing Options

MCLEAN, Va.--(BUSINESS WIRE)--Sept. 10, 2008--According to a new survey from Capital One Financial Corporation (NYSE:COF), a surprising number (61%) of Americans who currently have auto loans do not know the interest rate they are paying on their loan. In a challenging economy, when saving money is particularly important, many consumers may be… Continue

Added by Brian Peterson on September 22, 2008 at 8:21am — No Comments

"The Argument for Sound Business"

During my last 29 years in auto finance, my mantra has always been the

same: Put credit-impaired customers into vehicles that 1) they can

afford; and 2) a unit that won't break down before their first payment is

due. Want to see an example at the opposite end of these principles?

Google "Security Capital Funding" and you'll read outlandish statements

from their customers regarding the collection of payments and units not

being roadworthy.

I truly believe… Continue

Added by Kathleen O'Shaughnessy on September 19, 2008 at 4:21pm — 6 Comments

CREDIT CRISIS: Morning Headline Scan for 09.19.08

The financial crisis is evolving so quickly that we thought it best to simply share some crisis-related wire headlines with you. Viewing them in aggregate gives a good sense of what is happening in the moment. These headlines are as of 8:58 a.m. ET:

[WB] Wachovia shares rise 41% in pre-open trade 8:48 AM ET

[WM] Washington Mutual shares rise 45% in pre-open trade 8:47 AM ET

[MS] Morgan Stanley shares rise 50% in pre-open trade 8:46 AM ET

[GS] Shares of Goldman Sachs… Continue

Added by JJ Hornblass on September 19, 2008 at 9:16am — No Comments

Auto Industry Stocks Rallying

In the wake of near panic in the financial markets since Sunday, automotive stocks are rallying today. AmeriCredit is 2.19% higher at $9.95 a share. Asbury Automotive Group, AutoNation Inc., and Lithia Motors Inc. are all trading higher as well. Additionally, the index of large automotive manufacturers is 1.38% higher as talk of a federal bailout loan for the auto industry intensifies.

Added by JJ Hornblass on September 18, 2008 at 11:20am — No Comments

Porsche Takes Control of VW

Porsche today said it now holds 35.14% of the voting rights in Volkswagen group, Automotive News is reporting. Porsche said that as a result VW has now become a subsidiary of Porsche Automobil Holding under German law. Click here for the full story from Automotive News or here for The Wall Street… Continue

Added by JJ Hornblass on September 16, 2008 at 9:30am — No Comments

WSJ.com - Opinion: The Resilience of American Finance

The turmoil in the financial markets will reorganize the financial landscape. But this does not mean the financial industry will shrink dramatically. In fact the current crisis could well lead to an increase in the demand for financial services, as the world grapples with the need for new financial instruments, new risk management techniques, and the increasing complexity of the financial world.

Getty ImagesThere is no doubt that some of the most hallowed names in the industry,… Continue

Added by Steve Cortes on September 16, 2008 at 6:29am — 3 Comments

Top Industry Execs Headline Auto Finance Summit

The speaker roster for the Auto Finance Summit has been set, and it is comprised of an impressive group of 28 senior industry executives.

The summit’s speaker faculty will tackle topics such as credit performance, pricing and underwriting, risk management, funding, and technology. Here’s just a sampling of speakers from the roster:

• Dan Berce, president and CEO, AmeriCredit Corp.

• Mike Buckingham, president and CEO, Hyundai Motor Finance Corp.

• Ken Clark, SVP,… Continue

Added by Marcie Belles on September 16, 2008 at 5:00am — 1 Comment

Doubling Down

Dwindling demand for sport-utility vehicles has depressed auction prices. These gas guzzlers have lost value at about twice the normal rate, said Craig Carrow, vice president of automotive solutions at Fiserv Lending Solutions.

Though vehicle values are largely down nationwide, SUVs continue to fetch the highest prices in California. Still, "there is not as strong a difference as there used to be," Carrow said. "Prices used to be $1,000 to $1,200 better, and now they are half as… Continue

Added by Auto Finance News on September 15, 2008 at 10:30am — No Comments

Lehman Bankruptcy, BofA-Merrill Deal Changes Auto ABS Landscape

This weekend's remarkable events surrounding Lehman Brothers Holdings, Bank of America Corp., and Merrill Lynch & Co. changes the landscape for automotive securitizations.

BofA just last week spearheaded one of the more important auto loan securitizations of 2008, a $5.7 billion deal. There have been scant auto ABS deals so far in 2008, and this deal also successfully went to market despite a concentration… Continue

Added by JJ Hornblass on September 15, 2008 at 9:30am — No Comments

A Jump in Loan Terms

Loan terms have been inching upward as consumers struggle to make car payments fit into their tightening budgets. For the past few years, average maturities have hovered around 63 months, according to Federal Reserve data.

But the Fed’s most recent G19 report, released Monday, shows that in July, the average maturity among auto finance companies jumped to 67.2 months. In the month prior it was 63.5 month – nearly a… Continue

Added by Marcie Belles on September 10, 2008 at 12:30pm — 2 Comments

Auto Lending Ignorance

Apparently, Americans don't know much about their auto loans.

A new study released today by Capital One Financial Corp. found that 61%, yes 61%, of auto loan holders "do not know the interest rate they are paying on their loan." Also, 62% of the approximately 800 consumers surveyed "said they did not know refinancing their auto loan may save them money."

These are startling… Continue

Added by JJ Hornblass on September 10, 2008 at 10:17am — No Comments

Consolidation Looms

Auto finance companies have been growing for the past few years, putting acquisitions largely out of reach. It’s difficult to find a player large enough to acquire a company originating $5 billion or $10 billion of loans per year.

That dynamic is finally changing, and consolidation will be the name of the game soon. With so many companies trimming loan volume, M&A is inevitable. In some cases, the acquirer will simply be on the prowl for a bargain; in others, two companies will… Continue

Added by Marcie Belles on September 9, 2008 at 2:52pm — 1 Comment