Finance and Insurance Newsletter

Captives likely to get CFPB oversight

4:35 pm U.S. ET | Sept. 16, 2014
The Consumer Financial Protection Bureau is expected to issue an important new rule on Thursday defining which nonbank lenders -- including captive finance companies -- will be considered “larger participants” and thus subject to CFPB regulation.... Read More »

 

For GM Financial, closer GM ties could mean cheaper funds

11:00 am U.S. ET | Sept. 10, 2014
General Motors always intended to build GM Financial, formerly subprime lender AmeriCredit, into a full-service captive finance company. The automaker made that intent even more official last week by signing a bigger and more complete support agreement for GM Financial. Steve Jones, GM Financial vice president of investor relations/communications, says that the support agreement could lead to higher credit ratings for GM Financial.... Read More »

 

Cheap deals drive leasing to new high

11:00 am U.S. ET | Sept. 10, 2014
Cheap lease deals helped drive the lease penetration rate to a new high in the second quarter of 2014, according to Experian Automotive. "One out of four new cars that left a dealership in the second quarter was a lease," Melinda Zabritski, senior director of Experian, said during a conference call for analysts last week.... Read More »

 

Q&A

For subprime lender, success is about dealer service

11:00 am U.S. ET | Sept. 10, 2014
Southern Auto Finance Co., a small, regional subprime lender in Fort Lauderdale, Fla., is growing again after pulling back on loan originations and halting market expansion amid heightened industry competition in subprime in 2012 and 2013, CEO George Fussell says. The market is settling now, he says, and the company, often called SAFCo., is looking beyond its current 16-state area.... Read More »

 

JIM HENRY

Regulation forecast calls for rain, former CFPB exec says

11:00 am U.S. ET | Sept. 10, 2014
Rick Hackett, a former assistant director for the Consumer Financial Protection Bureau who was the bureau's liaison to the auto finance industry, predicted the bureau would probably unveil a long-awaited rule next week, defining which nonbanks fall under the CFPB's jurisdiction.... Read More »

 

JIM HENRY

F&I wait times have virtual repercussions

11:00 am U.S. ET | Sept. 10, 2014
Dealerships know that customer satisfaction suffers if car buyers spend time sitting outside the F&I office. But there’s another reason why dealerships should slash F&I wait times: Most customers who use their mobile devices at dealerships use them to shop for other vehicles and better deals elsewhere.... Read More »

 

Pay disparities are hurting morale, dealership retention, expert warns

11:45 am U.S. ET | Sept. 10, 2014
Rising disparities in pay between the F&I and sales departments are leading to morale problems and high turnover at dealerships, a noted F&I authority said at a conference in Las Vegas. Dealerships are testing a number of alternative pay plans, but nothing proposed so far appears to solve the problem.... Read More »

 

Subprime auto probe fails to restrain bond rush

11:21 am U.S. ET | Sept. 10, 2014
The federal probe into auto loans made to people with spotty credit is doing little to derail sales of bonds backed by the debt, even as investors demand more to own the riskiest pieces.... Read More »

 

FOILING FRAUD

Phony deals cost dealers reputation, vehicles and lenders

12:01 am U.S. ET | Sept. 8, 2014
For employees in a dealership's finance and insurance office, spotting a potentially fraudulent deal is top priority. A mistake not only can cost a dealership a vehicle, it can hurt the store's reputation and its relationships with lenders. It's a challenge for all dealership groups.... Read More »

 

With digital data, DARCARS has F&I down to a science

12:01 am U.S. ET | Sept. 8, 2014
Finance and insurance managers at DARCARS Automotive Group have a digital Big Brother watching them, ready to spit out a minute-by-minute account of their customer interactions if their sales fumble.... Read More »

 

Auto lenders curb loans to least-creditworthy customers

11:07 am U.S. ET | Sept. 3, 2014
Auto lenders hit the brakes on loans to customers with subprime and deep subprime credit in the second quarter of 2014, according to Experian Automotive. Loans to those customers accounted for 15.1 percent of new-vehicle loans for the quarter.... Read More »

 

JIM HENRY

New rules for asset-backed securities could impact subprime lenders

12:01 am U.S. ET | Sept. 3, 2014
The Securities and Exchange Commission last week laid out new rules for asset-backed securities, the financial practice in which lenders bundle loans and sell them off to investors to raise money to fund new loans.... Read More »

 

Who’s responsible for passing along bad credit info?

12:01 am U.S. ET | Sept. 3, 2014
Will dealerships catch fallout from the Consumer Financial Protection Bureau’s consent order last month with First Investors Financial Services Group? Experts disagree, with some saying no and others suggesting at least indirect implications for dealerships.... Read More »

 

Q&A

Sonic’s EchoPark stores will use self-branded products, financing

12:01 am U.S. ET | Sept. 3, 2014
Sonic Automotive is negotiating with auto lenders and F&I product administrators to provide private-label retail financing and F&I products for its new EchoPark stand-alone used-car dealerships, says Jeff Dyke, Sonic’s executive vice president of operations.... Read More »

 

Santander sued by investors over subprime lending practices

12:01 am U.S. ET | Sept. 3, 2014
A lawsuit seeking class-action status was filed against Santander Consumer USA last week on behalf of investors who claim the lender misled them about the company’s “auto lending business and underwriting practices.”... Read More »

 

JIM HENRY

Is CFPB guilty of spin?

12:01 am U.S. ET | Aug. 27, 2014
Remarks delivered by Consumer Financial Protection Bureau Director Richard Cordray and language used in a bureau statement last week were a lot harsher than the dry legalese of the consent order signed this month by the CFPB and First Investors Financial Services Group.... Read More »

 

Is rise in Q2 loan delinquencies a turning point?

12:01 am U.S. ET | Aug. 27, 2014
Industry-watchers insist that today's auto loan delinquency rates are low by historical standards. But a slight uptick in 30- and 60-day delinquencies in the second quarter could be a sign that the long decline in delinquencies could be reversing.... Read More »

 

F&I departments need a farm team

12:01 am U.S. ET | Aug. 27, 2014
The term “succession planning” is usually applied to dealer principals, but it can apply to F&I managers, too. Executives at two dealerships say store managers should nurture their own talent pool, so they have a ready replacement if a top F&I producer quits.... Read More »

 

'No evidence' of subprime auto loan bubble, Equifax economist says

12:01 am U.S. ET | Aug. 27, 2014
Equifax has joined other financial data crunching firms that dispute there's an alarming subprime auto loan bubble that's about to burst. Dennis Carlson, deputy chief economist for Equifax, said in an interview this week there's an easy tendency to decry subprime in general because of what happened in the past, and "it's not fair to do that.”... Read More »

 

The incentives debate: Who's being 'stupid'?

12:01 am U.S. ET | Aug. 25, 2014
Some big rivals dismiss American Honda sales boss John Mendel's grim warning that extended loan terms and other strategies being employed by competitors hurt resale values, customer loyalty and ultimately profits. So who's right?... Read More »

 

CFPB fines subprime lender First Investors Financial Services Group for sending credit bureaus inaccurate info

12:30 pm U.S. ET | Aug. 20, 2014
The Consumer Financial Protection Bureau fined subprime auto lender First Investors Financial Services Group nearly $3 million for knowingly providing inaccurate information to credit reporting agencies for at least three years.... Read More »

 

JIM HENRY

Did dealers hurt themselves with the carve out?

12:01 am U.S. ET | Aug. 20, 2014
There’s no mistaking that federal regulators are serious about policing auto lenders. By extension, auto dealers feel they’ve got a big target on their backs, too.... Read More »

 

Auto loans could get boost from revamped FICO scores

12:01 am U.S. ET | Aug. 20, 2014
A planned update in the way FICO scores are calculated should help some borrowers qualify more easily for auto loans by putting less weight on overdue medical debt when calculating credit scores, according to Fair Isaac Corp.... Read More »

 

Canadians stretch out auto loans as debt warnings go ignored

5:34 am U.S. ET | Aug. 20, 2014
The average term of a light-vehicle loan in Canada is 69 months, close to a peak of 72 months set in the third quarter of 2013, according to J.D. Power. Longer-term car loans are leaving Canadians in debt for a longer time, analysts say. And the borrowing binge adds to signs Canadians are continuing to buy big-ticket items and tuning out warnings about unsustainable debt growth.... Read More »

 

JAMIE LaREAU

Skipping wheel-and-tire was big mistake

12:01 am U.S. ET | Aug. 20, 2014
Wheel-and-tire insurance is a valuable product. There, I admit it. It's not the “snake oil” that a cynical friend once espoused it and other F&I products to be.... Read More »

 

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Defying Dad, by building on his legacy

Defying Dad, by building on his legacy

At Courtesy Auto Group in Illinois, second-generation dealers Ray and Rik Fregia have seen a 30 percent boost in sales this year, thanks largely to million-dollar overhauls at their three stores. Mon., September 15
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