Featured Blog Posts – November 2009 Archive (14)

Pulling the Class-Action Trigger

Looks like mandatory arbitration clauses are starting to find their way out of auto loan contracts, a move that could open the door for class-action lawsuits against lenders.

JPMorgan Chase will remove mandatory arbitration clauses from credit card agreements, pending settlement of a lawsuit accusing the bank and other financial institutions of conspiring to force cardholders to resolve credit-card disagreements out of court. The bank stopped sending debt collection cases to… Continue

Added by Marcie Belles on November 24, 2009 at 1:07pm — 1 Comment

Lenders Fall Short on Online Auto Finance Customer Service

In stores, shoppers try to avoid long lines and ignorant salespeople. Translation for online retailers: A successful web site requires the ability to quickly provide customers the specific information they seek.

For many auto financiers, that goal is not yet reality. And in a business as research-prone as car shopping — last year, 75% of new-vehicle buyers researched their purchases online, according to a J.D. Power and Associates survey of 27,901 consumers — poor online service… Continue

Added by Marcie Belles on November 23, 2009 at 1:00pm — No Comments

Report: Investment Firm Blackstone Eyes CitiFinancial Auto

Blackstone and other private-equity firms have reportedly held informal talks about buying CitiFinancial Auto, the nonprime auto unit of Citigroup.

Potential buyers are looking to buy the $16 billion loan portfolio at a steep discount, according to a report in today's New York Post. CitiFinancial Auto originates mainly indirect loans via 6,000 dealers nationwide. Its… Continue

Added by Marcie Belles on November 19, 2009 at 10:30am — 3 Comments

Will Remarketing Challenges Hamstring Credit Unions?

Credit unions have been steadily increasing their share of the auto finance pie, picking up originations as finance companies and captives battle capital issues. But along with that higher origination volume come higher defaults, and the latest data reveals that credit unions may have a hard time keeping repossession-related losses in check.

CUNA recently surveyed 535 credit union executives about liquidation of repossessed vehicles and found that it takes credit unions 46 days to… Continue

Added by Marcie Belles on November 18, 2009 at 1:30pm — 1 Comment

GMAC’s CEO de Molina Resigns

Alvaro de Molina has resigned as GMAC Financial Services' chief executive and director. The GMAC Board of Directors has named Michael A. Carpenter, a board member since May 2009, as his replacement.

Carpenter's previous experience includes chief executive positions at Citigroup's Global Corporate & Investment Bank, Salomon Smith Barney, Travelers Life & Annuity and Kidder Peabody. He has also held senior positions at GE Capital, General Electric, and Boston Consulting… Continue

Added by Mary Wisniewski on November 16, 2009 at 4:30pm — 3 Comments

Will C4C Fuel Higher Delinquencies?

When it comes to bolstering car sales, Cash for Clunkers did its job. The federal program sparked 690,000 sales, pushing up August volume to 1.2 million units at a time when monthly volume averaged 860,000 units.

I know a good percentage of those sales were paid for in cash, and the overall credit quality of the buyers was relatively high. But might we start to see higher-than-normal delinquencies among car buyers who financed their C4C purchases?…

Continue

Added by Marcie Belles on November 16, 2009 at 1:30pm — 5 Comments

CBA Eliminates Annual Auto Finance Conference

The Consumer Bankers Association will not hold its auto finance conference in 2010. The Arlington, Va.-based trade group instead will present an event on all of retail banking next June.

CBA's auto finance conference in 2010 would have been the organization's 30th annual event.…

Continue

Added by JJ Hornblass on November 13, 2009 at 2:30pm — No Comments

Daimler Slashes Smart Car Discount

With gas prices in the mid-$2-per-gallon range, the Smart car has lost some of its luster. Only 661 of Smart’s Fortwo model sold in the U.S. last month, down 19% from September and down 70% from October 2008. In fact, last month’s sales of the mini vehicle hit their lowest level since the car’s American debut early last year.

To lure customers, Daimler Financial Services introduced a “Value Days” scheme: 1.9% financing for five years, with payments as low as $198 per month. The deal… Continue

Added by Marcie Belles on November 13, 2009 at 12:48pm — 2 Comments

VW Makes a Move in Manhattan

Though parking in New York City is often hard to find, Volkswagen Group of America has snared a prime spot along 11th Ave. It will join Mercedes, Lexus, BMW, Toyota, and others on the West Side strip known as the “Auto Sales Autobahn,” in a 265,000-square-foot building it bought to serve as flagship Audi and Volkswagen dealerships.

The move is part of a broader global expansion scheme, which includes plans to unseat sales leader Toyota. Volkswagen expects to start selling cars at the… Continue

Added by Marcie Belles on November 13, 2009 at 11:30am — No Comments

Lenders Bank on “Best” Dealers

LAS VEGAS — Trying to be profitable in a recession is like striving to be an actor in Hollywood at any given time — difficult at best, and impossible at worst.

To puts the odds more in one’s favor, lenders are curbing losses and improving operations by increasing contacts with profitable dealer-customers, dropping unprofitable ones, and all the while, maintaining tighter underwriting on the retail side.…

Continue

Added by Marcie Belles on November 11, 2009 at 12:00pm — No Comments

Santander Buys HSBC Loans, Servicing Ops

Santander Consumer USA is further entrenching itself in the sector with a $904 million purchase of HSBC Finance Corp.’s auto loan servicing business and $1 billion of receivables.

The acquisition, announced yesterday and slated to close in the first quarter of 2010, would include HSBC’s loan servicing facilities in San Diego and Lewisville, Texas. Most of the 700 employees at the two locations will be offered jobs with Santander.…

Continue

Added by Marcie Belles on November 11, 2009 at 11:00am — 5 Comments

Have Used-Car Prices Peaked?

Lenders have been benefitting from strong used-vehicle prices all year. Higher-than-expected prices at auction have muted losses on repossessions and off-lease vehicles. GMAC and Ford Credit, among others, cited strong used-car values as part of the reason for their improved third-quarter earnings.

But in its Used-Vehicle Value Index released today, Manheim Consulting noted a slight decline in wholesale pricing. The October reading inched down to 117.4, from a record 118.5 in… Continue

Added by Marcie Belles on November 6, 2009 at 12:00pm — 3 Comments

A Step Up for Credit Unions

Credit unions have gained ground against other auto finance providers in the last several years. Today, credit unions took another important step forward by securing their second batch of manufacturer pricing incentives directly from an OEM.

In the latest boon for credit unions, Chrysler agreed to offer pricing incentives directly to credit unions, as part of the "Invest in America" discount program for… Continue

Added by JJ Hornblass on November 4, 2009 at 2:49pm — 3 Comments

GMAC Bangs Heads With the FDIC

GMAC and the FDIC appear to be at loggerheads over auto finance.

According to an article in today's Wall Street Journal, GMAC and the FDIC have been battling over GMAC's auto finance business. An excerpt from the article:

The FDIC also was cool to GMAC's desire to expand its auto lending by reaching out to consumers with lower credit…

Continue

Added by JJ Hornblass on November 2, 2009 at 10:30am — 8 Comments