F&I’s biggest boogeyman

Jim Henry is a special correspondent for Automotive News

Halloween is a good time to inventory the monsters under the F&I bed.

Shining a flashlight under there, we see that credit availability is good. Interest rates are low. The economy is slowly improving. Even housing seems finally to be recovering. No real monsters there.

In the shadows, there’s the so-called fiscal cliff, but most observers seem to think, or hope, that after the election some sort of compromise will emerge. There’s the economic crisis in Europe, but that seems far off.

That leaves government regulation as the biggest, scariest unknown for auto lenders and dealers.

“It scares the hell out of me that they might want to regulate this,” said Kalei Dudoit, general manager of Desert Toyota and Desert Scion in Las Vegas. That is, Dudoit said he’s worried the Consumer Financial Protection Bureau might regulate lenders in a way that will limit how much dealers make for arranging loans.

No matter how much the CFPB tries to reassure lenders and dealers that it will work in consultation with the industry, there still aren’t any specifics. Until then, fear of the unknown makes CFPB a boogeyman.