Featured Blog Posts – October 2009 Archive (22)

White House Blasts Edmunds.com Over C4C Claims

In an entry on the White House blog yesterday, White House Director of New Media Macon Phillips calls Edmunds.com’s C4C analysis “faulty” and “designed to grab headlines.” The 500-word blog came in response to data released the day prior by the auto-info provider that concluded that Cash for Clunkers cost taxpayers $24,000 per vehicle sold.

At the heart of the debate is the percentage of C4C new-vehicle sales that were incremental — in other words, sales that would not have occurred… Continue

Added by Marcie Belles on October 30, 2009 at 4:00pm — 3 Comments

Some Props for Nicholas Financial

There appears to be a some Wall Street investors moving toward below-the-radar financial services stocks, and yesterday Nicholas Financial, the subprime auto lender, got some props, via SeekingAlpha.com, from fund manager Eddy Elfenbein, who writes the Crossing Wall Street blog:…

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Added by JJ Hornblass on October 30, 2009 at 9:30am — No Comments

A $118 Million Ray of Hope

In what appears to be the first acquisition in the auto finance space in quite some time, payday lender Dollar Financial Corp. agreed yesterday to buy Dealers’ Financial Services LLC for $118 million.

Lexington, Ky.-based DFS is an auto-loan facilitator for U.S. military personnel. As part of its MILES Program, DFS helps active duty military service members secure autos from a network of 545 franchised and independent auto… Continue

Added by Marcie Belles on October 29, 2009 at 12:30pm — 3 Comments

The “New” breed of special finance customers

In my training, I always talk to special finance personnel about not stereotyping special finance customers. I stress for them to always remember at least one customer that they helped get financing when they were in a bad spot in their lives that was due to circumstances beyond their control. It helps to make the job so much more rewarding.

My one stabilizing customer was one of my first customers back in 1993. Their credit was perfect except they had filed bankruptcy. Special finance was… Continue

Added by Rob Hagen on October 29, 2009 at 12:36am — 5 Comments

Fresh Funds for GMAC

After failing a bank “stress test” in May, GMAC was given six months to raise $11.5 billion. Looks like as much as nearly half that money may come from the federal government.

Apparently, GMAC is in advanced talks with the Treasury Department for another cash infusion — this time, as much as $5.6 billion, according to the Wall Street Journal. (The amount could… Continue

Added by Marcie Belles on October 28, 2009 at 12:30pm — 3 Comments

Halfway There

In the past two years, lenders have focused on both retail customers and dealer clients to stem losses and improve operations. Specifically, lenders have tightened underwriting guidelines — raising credit-score minimums, lowering loan-to-value ratios, and shortening loan terms. On the dealer side, financiers are keeping tighter tabs on titling efforts and more closely monitoring dealer stats.

From what I can glean so far, it seems like the consumer-facing changes are working.… Continue

Added by Marcie Belles on October 26, 2009 at 2:36pm — 1 Comment

A Whopping Incentive

If the Guinness Book had a record for the largest vehicle incentive, Colorado’s tax credit for the Tesla Roadster would merit the title.

Until yearend, Colorado residents who buy the new $109,900 Roadster electric sports car will get back about $42,083 — nearly 40% off the sticker price — from the state.

The incentive, part of a statewide program to promote electric vehicles, offers an income tax credit of up to 85% of the difference between the price of certain… Continue

Added by Marcie Belles on October 23, 2009 at 11:32am — No Comments

Do Auto Loan Portfolios Deserve the Kudos?

Increasingly, banks are finding good news in their auto loan portfolios, and they are talking them up. Whether that talk is merited is debatable.

Case in point is US Bancorp. During the bank's earnings call yesterday, company officials said:

Our auto loans and lease portfolios were the exception in the…

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Added by JJ Hornblass on October 22, 2009 at 10:30am — 8 Comments

An Inside Look at Rattner’s “Team Auto”

Since formation of the Auto Task Force early this year, details on the group’s inner workings have been kept largely under wraps. But in this 6,000-word article penned by Steven Rattner, the former task force chief offers an extensive look at how decisions were made to reshape GM and Chrysler.

Here are some excerpts:

On Getting… Continue

Added by Marcie Belles on October 21, 2009 at 11:00am — No Comments

Bucking the Trend

Sometimes it pays to be in the minority. While most automakers have posted lower year-over-year sales volume, Hyundai Motor Group sales are up 2.6% this year and its marketshare has climbed 2.2 percentage points.

An article today on CNNMoney.com outlines some of the reasons for the OEM’s growth, including a strong mix of cars priced lower than the competition and its… Continue

Added by Marcie Belles on October 20, 2009 at 11:30am — 2 Comments

California Toughens Stance on Trade-Ins

While the federal government mulls the most effective way to implement consumer protections with regard to financial transactions, California has gotten the ball rolling with a law that takes effect Jan. 1.

Gov. Arnold Schwarzenegger signed into law SB 95, known as the California Car Buyers Protection Act, which gives dealers 21 days to pay off any balance owed on a trade-in. It also prohibits dealers from reselling a car until the title is cleared.

Since dealers hit on… Continue

Added by Marcie Belles on October 19, 2009 at 11:30am — No Comments

Better Quality, Worse Performance

Despite moves initiated two years ago to tighten underwriting, Brookline Bank continues to see deterioration in its auto loan portfolio.

The Massachusetts bank reduced originations and targeted higher credit quality borrowers, yet delinquencies continue to climb.

Here are the stats:

• As of Sept. 30, Brookline Bank’s portfolio totaled $566.9 million, with an average credit score of 760. The year prior,… Continue

Added by Marcie Belles on October 16, 2009 at 12:00pm — 2 Comments

Lamborghini Offers No-Interest Financing

Lamborghini of America launched the Lamborghini Retail Finance Plan, which offers 0% financing for 60 months on 2009 and 2010 Murciélago models.

To qualify, borrowers must have credit scores above 740 and make a 25% down payment. On a base model Murciélago LP640-4, which retails for $354,000, payments could translate to $87,500 down and $4,400 per month.

For car buyers looking for a smaller cash outlay, Lamborghini’s 12-year financing plan at 5.9% interest might work… Continue

Added by Marcie Belles on October 15, 2009 at 12:30pm — 2 Comments

Relishing the Upbeat Vibe

It's been more than two years since the credit cycle started turning. It was in late 2006 when there was a realization that credit had been too easy and that originations would slow and losses would rise. Two long years have passed without any positive sentiments for the future. Two very long years.

At the Auto Finance Summit this week, I felt for the first time since 2006 that the long downward momentum in consumer credit was finally turning around. I can cite several examples, but… Continue

Added by JJ Hornblass on October 15, 2009 at 12:30pm — 2 Comments

Big 3Q for Chase Auto

Chase Auto Finance, JP Morgan Chase & Co.'s auto lending and leasing unit, turned in strong performance last quarter, and appears to be picking up market share amid a turbulent economy.

Auto originations at Chase climbed 82% year-over-year and 30% quarter-over-quarter, according to the company's 3Q09 earnings report released today. Chase said its market share gains are coming… Continue

Added by JJ Hornblass on October 14, 2009 at 10:30am — 1 Comment

Looking Up

LAS VEGAS — Though the auto finance industry has vastly improved in the past year, it is not out of the woods yet. That was the sentiment expressed by senior executives from a host of finance companies during the opening sessions at the Auto Finance Summit yesterday.

Pricing in the capital markets has tightened tremendously, and asset-backed transactions for subordinate loan tranches are starting to get done. Meanwhile, estimates are ticking up for new-vehicle sales volume in 2010,… Continue

Added by Marcie Belles on October 13, 2009 at 10:41am — No Comments

Auto Lending Does Just Fine

Much talk this week was centered on the substantial drop in consumer credit outstanding in July, and indeed the decline at an annualized rate of 10.5% was steep.

But auto lending should not be lumped into that dire assessment. In fact, auto loan originations grew 2.3% in the month of July, according to the Federal Reserve. And that growth is not too shabby considering the massive contraction in… Continue

Added by JJ Hornblass on October 9, 2009 at 10:30am — No Comments

HBR Blames GM For Saturn's Demise; Then Blames Saturn For GM's Downfall

The Harvard Business Review has some particularly harsh words for General Motors today, as it opines on the obituary of Saturn. In a post titled "Why Saturn Was Doomed To Fail," author Mark Ritson places the blame squarely on GM, going as far as to point to Saturn as one reason why taxpayers now own the manufacturer.

To… Continue

Added by Mike Gibb on October 6, 2009 at 3:11pm — 2 Comments

Carsala: Another Bump in the Road of Vehicle Sales

As if vehicle sales weren’t stalled already, now consumers have another tool in their car-buying arsenals: a web site called Carsala.

Carsala offers a number of nifty services, including a Price Checker feature and a team of professional negotiators. With Price Checker, consumers plug in a VIN and the dealer’s price — and a few other identifying factors, like mileage, ZIP code, and color — and the site will rate the sale price on a… Continue

Added by Marcie Belles on October 6, 2009 at 2:24pm — 8 Comments

Return of the 0% Loan?

Question: What do Nissan, Hyundai, Suzuki, Kia, Mazda, and Mitsubishi have in common?

Answer: Each seems to be offering at least one 0% auto lending deal in October.

Is this the return of the 0% loan?

Zero percent financing came into the car-buying lexicon after 9/11, and boy did it provide a shot in the arm to the US auto industry. But 0%… Continue

Added by JJ Hornblass on October 6, 2009 at 2:00pm — 4 Comments