Automotive News Finance & Insurance Blogs

If dealers don't weigh in, they can't gripe

Posted 12:30 pm U.S. ET, March 25
blogs Jim Henry is a special correspondent for Automotive News.
 
Dealers have a chance right now to weigh in on what they like and don’t like about their lenders, and they shouldn’t miss the opportunity. The survey period for the J.D. Power U.S. Dealer Financing Satisfaction Study is at about the halfway point. Questionnaires went out via mail and email on March 1 and will be in the field through April. This year’s results should be published ...
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Size of average tax refund makes a decent down payment

Posted 11:45 am U.S. ET, March 18
blogs Jim Henry is a special correspondent for Automotive News.
 
For anybody keeping track -- which is to say, anybody interested in subprime auto lending – U.S. tax refunds have fallen a bit more behind than they were a few weeks ago. Tax refund season is typically the high point of the year for subprime auto loans. The IRS reported in a March 12 update that it had processed around 54.3 million refunds -- valued at about $162.1 billion -- as of March 6 ...
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Congressmen get testy with CFPB chief Cordray

Posted 11:45 am U.S. ET, March 11
blogs Jim Henry is a special correspondent for Automotive News.
 
The Consumer Financial Protection Bureau and its critics on the House Financial Services Committee traded jabs in a tense session last week as CFPB Director Richard Cordray presented the bureau’s semiannual report. Committee Chairman Jeb Hensarling, R-Texas, used the occasion to advocate again that a bipartisan committee should lead the CFPB, not a single director. Hensarling repeated the ...
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The auto fallout from tax refund delays

Posted 11:45 am U.S. ET, March 4
blogs Jim Henry is a special correspondent for Automotive News.
 
Tax refund season is typically the high point of the year for subprime auto lenders, but so far the early tax refund statistics are down slightly from a year ago. Through Feb. 20, the IRS had processed about 40 million refunds, down 1.1 percent from a year ago. The average refund was slightly higher at $3,210 vs. $3,116 tallied from Jan. 1 through Feb. 21, 2014, the IRS said. Tax refunds seem to ...
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Lender groups want answers from the CFPB

Posted 12:15 pm U.S. ET, Feb. 25
blogs Jim Henry is a special correspondent for Automotive News.
 
A letter sent last week by the American Financial Services Association and other trade associations to Richard Cordray, director of the Consumer Financial Protection Bureau, was aimed at prodding the CFPB to publicly respond to a study AFSA commissioned last year. “There certainly has been more than enough time for them to address some of the issues,” Chris Stinebert, CEO of AFSA, tol ...
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GM Financial-Chevy lease exclusivity seems likely

Posted 11:15 am U.S. ET, Feb. 18
blogs Jim Henry is a special correspondent for Automotive News.
 
There wasn’t much doubt, but General Motors disclosed for the first time in an SEC filing on Feb. 4 that it is considering plans to throw all Chevrolet lease incentives to GM Financial instead of sharing them among GM Financial, Ally Financial and U.S. Bank. GM Financial became GM’s exclusive preferred lease lender for the Buick and GMC brands this month and will take over those dutie ...
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Are flat finance fees inevitable? How to lessen the blow

Posted 11:30 am U.S. ET, Feb. 18
blogs Jamie LaReau covers the automotive retail beat for Automotive News.
 
Flat finance fees are coming. And if you now derive more than 40 percent of your F&I revenue per vehicle from a finance reserve, you’re in trouble. So says Larry Dorfman, CEO of F&I provider EasyCare. He warned that flat fees are on the horizon during a conversation on the sidelines of the National Automobile Dealers Association convention in San Francisco last month. Last week I ...
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A positive outlook for e-contracting

Posted 12:01 am U.S. ET, Feb. 11
blogs Jim Henry is a special correspondent for Automotive News.
 
When it comes to e-contracting, maybe the glass is finally more half full than half empty. Consider that e-contracting accounted for 56 percent of U.S. contracts for Ford Motor Credit Co. in 2014, according to Joy Falotico, executive vice president of marketing, sales and the Americas at the captive. Meanwhile, Toyota Financial Services said in September it was on track to generate 65 percent of ...
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Ally's Carpenter leaves on a high note

Posted 11:45 am U.S. ET, Feb. 4
blogs Jim Henry is a special correspondent for Automotive News.
 
Michael Carpenter, who retired as CEO of Ally Financial on Monday, can leave saying, “Mission accomplished.” On Carpenter’s watch, Ally repaid its U.S. government bailout plus a profit for taxpayers and freed itself of government ownership, effective in December. At the tail end of 2008 the U.S. Treasury rescued Ally’s predecessor company, GMAC, in the runup to General Mo ...
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Auto lenders cite discipline with U.S. sales booming

Posted 11:00 am U.S. ET, Jan. 28
blogs Jim Henry is a special correspondent for Automotive News.
 
SAN FRANCISCO -- “Discipline” was the watchword for auto lenders in panel discussions and interviews in and around the National Automobile Dealers Association convention here last week. Thasunda Duckett, CEO of Chase Auto Finance, repeatedly cited “prudence and discipline” in prepared remarks at a J.D. Power panel and in an interview afterward. Other competitors hit the s ...
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The lesson of the pizza delivery man

Posted 11:00 am U.S. ET, Jan. 21
blogs Jim Henry is a special correspondent for Automotive News.
 
Here’s a lesson for dealerships that run security cameras in the F&I office and elsewhere: Treat all store visitors well. A used-car dealership outside New Bedford, Mass. probably regrets -- an assumption, because the store’s not answering the phone -- chiseling a pizza delivery guy out of a tip, an episode captured on security cameras that somehow made its way onto social media l ...
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Lending practices face new scrutiny: States

Posted 11:30 am U.S. ET, Jan. 14
blogs Jim Henry is a special correspondent for Automotive News.
 
State officials aren’t far behind the federal government in the present crackdown on auto lenders, especially in the subprime segment. That means lenders -- and indirectly, dealers -- have more to worry about than just the Consumer Financial Protection Bureau. The New York Department of Financial Services in December announced a settlement worth $3 million in penalties plus another $8 mill ...
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Wishing auto lenders a happy, rational new year

Posted 10:30 am U.S. ET, Dec. 30
blogs Jim Henry is a special correspondent for Automotive News.
 
Auto lenders are about to embark on another year of worry that the other guy will go “irrational” and start making money-losing loans to gain U.S. market share. They fret they’ll be forced to decide whether to give up share or follow suit, sparking losses. But they probably don’t have much to worry about because U.S. auto sales are expected to keep growing. That rising tid ...
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Consent orders and the law of unintended consequences

Posted 11:14 am U.S. ET, Dec. 23
blogs Jim Henry is a special correspondent for Automotive News.
 
The Consumer Financial Protection Bureau quietly terminated a consent order with Minneapolis-based U.S. Bank last month, a contrast to the fuss it made in announcing the agreement in June 2013. At that time the bureau’s fanfare included a press release and media conference call with CFPB Director Richard Cordray. Cordray accused U.S. Bank and a partner, Dealers’ Financial Services of ...
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Will the CFPB redefine “larger”?

Posted 12:01 am U.S. ET, Dec. 17
blogs Jim Henry is a special correspondent for Automotive News.
 
Auto industry watchers that formally weighed in on the Consumer Financial Protection Bureau’s definition of “larger” auto lenders took predictable positions before the public comment period closed last week. The CFPB proposes to extend its jurisdiction to larger nonbanks, which it defines as those that generate 10,000 auto loans or leases annually. The American Financial Servic ...
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Who distorted what? Wording of CFPB statement will get its own investigation

Posted 11:30 am U.S. ET, Dec. 10
blogs Jim Henry is a special correspondent for Automotive News.
 
The ombudsman’s office for the Consumer Financial Protection Bureau said it would conduct an independent review into complaints that the CFPB’s press releases don’t match the consent orders they describe -- something auto finance insiders have complained about bitterly but privately, for fear of provoking the bureau. The complaint: that the press releases overhype the wrongdoing ...
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F&I jobs hold a powerful lure for women

Posted 11:00 am U.S. ET, Dec. 10
blogs Jamie LaReau covers the automotive retail beat for Automotive News.
 
It seems women are keen to work in the finance and insurance department. In fact, F&I has the highest percentage of women employees in a dealership, after the office/administration department. Women make up 92 percent of the office/administration staff at dealerships, according to the National Automobile Dealers Association’s 2014 Dealership Workforce Study Industry Report, released De ...
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Auto finance benefits from looser purse strings

Posted 12:01 am U.S. ET, Dec. 3
blogs Jim Henry is a special correspondent for Automotive News.
 
Here’s good macroeconomic news for the auto finance industry: The Federal Reserve Bank of New York says U.S. households have concluded a “deleveraging period,” a fancy way of saying households have quit spending less and saving more. Instead, they are spending more and borrowing more -- including $105 billion in auto loan and lease originations, the highest amount in almost 10 y ...
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Military ends paycheck deductions for car loans

Posted 12:01 am U.S. ET, Nov. 26
blogs Jim Henry is a special correspondent for Automotive News.
 
The U.S. Department of Defense last week made it impossible for service members to use the reliable but old-fashioned military allotment system to make auto loan payments -- a small-scale example of a couple of bad apples in auto lending ruining things for everyone else. In 2013 the CFPB accused an F&I products vendor and its auto lender partner of requiring military service members to sign u ...
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Free advice for consumers can be worth the price

Posted 12:01 am U.S. ET, Nov. 19
blogs Jim Henry is a special correspondent for Automotive News.
 
There’s a bright spot for dealerships that do a lot of business with automakers’ captive finance companies and preferred lenders, data on the website Wallet Hub show: Car manufacturers (that is, captives) charge the lowest auto loan rates for new cars, at 40 percent below average. Credit unions follow, at 24 percent below average. National banks charge rates that are close to average, ...
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Popping the subprime bubble myth

Posted 12:01 am U.S. ET, Nov. 19
blogs Arlena Sawyers covers remarketing for Automotive News.
 
There is no subprime auto loan bubble, darn it. That message came through loud and clear at session after session devoted to subprime lending during the Used Car Week conference sponsored by Auto Remarketing magazine last week in Las Vegas. The recurrent theme was sparked by recent media stories -- presumably those by The New York Times -- that claim there is a troubling trend of consumers with ...
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‘Disparate impact’ opposition sees hope

Posted 12:01 am U.S. ET, Nov. 12
blogs Jim Henry is a special correspondent for Automotive News.
 
Hope remains among opposers of the “disparate impact” theory that the U.S. Supreme Court could ultimately rule against the theory in court, maybe in 2015. Law firm Ballard Spahr even described the disparate impact theory as “on the ropes” in a online article not long ago because a federal district court recently ruled against the theory in a case involving the U.S. Departm ...
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SEC joins pile of regulators probing subprime loan securitization

Posted 12:01 am U.S. ET, Nov. 5
blogs Jim Henry is a special correspondent for Automotive News.
 
It appears that when it comes to investigating the securitization of subprime auto loans, the bigger the mountain of regulators, the better. The latest agency to pile on is the Securities and Exchange Commission, which is launching probes on top of parallel investigations by the U.S. Department of Justice and some state attorneys general. Last week, GM Financial and Ally Financial disclosed in s ...
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Looking for a new F&I product? Mull this

Posted 12:01 am U.S. ET, Nov. 5
blogs Larry P. Vellequette covers Chrysler for Automotive News.
 
Consider this a free idea -- the kind that hopefully somebody out there takes and develops and uses to make a lot of money. Dealers need to offer new-vehicle customers a kind of “CarFax” protection plan that spares them from the inevitable dings to vehicle equity that are now commonplace in an age of nearly unlimited information. Here’s how it should work: “John” i ...
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The story behind that list of dealership slang

Posted 12:01 am U.S. ET, Oct. 29
blogs Jim Henry is a special correspondent for Automotive News.
 
F&I managers -- mostly appalled, but at least partly amused -- recently passed around online a link to a “Car Dealer Dictionary” of dealership slang, including terms that are supposedly in use in F&I departments. Some entries are harmless, such as “Up” for “potential customer.” Some of the terms are familiar in auto industry circles, such as the notori ...
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