Automotive News Finance & Insurance Blogs

Why Group 1 finds F&I a tougher sell overseas

Posted 12:01 am U.S. ET, April 23
blogs Jim Henry is a special correspondent for Automotive News.
 
Think F&I managers have it tough making a sale in the United States? It’s a lot tougher in the United Kingdom and in Brazil, Group 1 Automotive says. Group 1’s average F&I revenue per vehicle retailed in the United States last year was $1,371. In the United Kingdom, it was $615, and in Brazil, $416. “Americans want their car, they want it today, and they want to drive i ...
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Inquiry into alleged CFPB bias picks up steam

Posted 12:01 am U.S. ET, April 16
blogs Jim Henry is a special correspondent for Automotive News.
 
The issue of whether, ironically, the Consumer Financial Protection Bureau allegedly discriminates against its own employees has got legs. A subcommittee of the House Financial Services Committee heard really scorching -- but totally one-sided -- testimony in a hearing earlier this month from Angela Martin, an attorney who works at the CFPB, accusing the CFPB of a “culture of retaliation an ...
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Misleading sales ads hurt F&I

Posted 12:01 am U.S. ET, April 9
blogs Jim Henry is a special correspondent for Automotive News.
 
State and federal regulators have cracked down this year on misleading dealership advertising. In just about every case, their complaint was that the advertising failed to adequately disclose financial terms or hidden costs. The regulators’ complaints weren’t aimed at the F&I office. But customers don’t necessarily distinguish between a dealership’s marketing and F& ...
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Off-lease surge should spark even more leasing

Posted 12:01 am U.S. ET, April 2
blogs Jim Henry is a special correspondent for Automotive News.
 
Scheduled lease terminations are expected to grow again in 2014, providing a strong tailwind for additional leases this year and higher customer loyalty. Lease customers are more loyal than loan or cash customers to a particular brand or dealership. After all, the dealership has a built-in chance to sell or lease the customer another car when they bring in their off-lease vehicle. In 2013, lease ...
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Ally takes step toward 'free at last' with IPO

Posted 12:01 am U.S. ET, March 27
blogs Jim Henry is a special correspondent for Automotive News.
 
NEW YORK -- It’s been a long time coming, but Ally Financial finally filed for its initial public stock offering today -- another step in a long process toward becoming a truly independent company. Ally CEO Michael Carpenter said in an interview at the NADA convention in New Orleans in January that Ally was working on becoming “free at last” -- that is, free of both government a ...
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CFPB, FTC Web sites differ in tone

Posted 12:01 am U.S. ET, March 26
blogs Jim Henry is a special correspondent for Automotive News.
 
While the Federal Trade commission and Consumer Financial Protection Bureau share a commitment to ensure consumers get a fair shake on auto finance, they gather and impart consumer information differently. The FTC develops many of the auto finance tips on its Web site in cooperation with the American Financial Services Association and the National Automobile Dealers Association. The Consumer Fin ...
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House committee presses CFPB for answers

Posted 12:01 am U.S. ET, March 19
blogs Jim Henry is a special correspondent for Automotive News.
 
The Consumer Financial Protection Bureau has ignored a congressional deadline to specify how it determines discrimination in auto lending. The House Financial Services Committee sent CFPB Director Richard Cordray a sharply worded letter on March 7 requesting in no uncertain terms answers to a list of questions concerning the CFPB’s specific methodology for determining that a disparate impac ...
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Consumer site wants buyers to pay less for vehicles

Posted 10:30 am U.S. ET, March 12
blogs Jim Henry is a special correspondent for Automotive News.
 
The consumer advice Web site Interest.com offers prudent financial guidance to keep car buyers out of debt so they can spend more on other priorities -- such as a retirement nest egg or college for the kids.Lucky for the auto industry, few people seem to be taking that advice."People are committing way too much discretionary income to a car," says Mike Sante, managing editor of Interest.com. Inste ...
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Why the F&I office still matters

Posted 12:01 am U.S. ET, March 5
blogs Jim Henry is a special correspondent for Automotive News.
 
There's good news for the future of the F&I office.A recent McKinsey & Co. study says one of the main reasons consumers still come to a brick-and-mortar dealership instead of buying cars online is to get questions answered about finance and insurance that can't be addressed, or can't be answered "conclusively," online."You can shop for home mortgages online and find out from a lot of sites ...
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The disconnect lingers between auto finance and the CFPB

Posted 12:01 am U.S. ET, Feb. 26
blogs Jim Henry is a special correspondent for Automotive News.
 
The auto finance industry and the Consumer Financial Protection Bureau have a fundamental disconnect.The auto finance industry sees itself as unique while the CFPB sees it as just one more consumer finance sector, essentially not that different from mortgages, credit cards or student loans.Last year, after issuing a bulletin equating dealership compensation based on dealer reserve with discriminat ...
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Auto loans just keep growing

Posted 12:01 am U.S. ET, Feb. 19
blogs Jim Henry is a special correspondent for Automotive News.
 
Auto loans had another double-digit growth spurt in the fourth quarter, Experian Automotive reports.Total auto loan balances outstanding reached $798.5 billion in the quarter, an increase of 11 percent from the 2012 period and the highest total since Experian started publishing its numbers in 2007. The third-quarter total of $782.9 billion had also been a high, up 15 percent from the same 2012 per ...
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No need to panic as big banks pare dealers

Posted 12:01 am U.S. ET, Feb. 12
blogs Jim Henry is a special correspondent for Automotive News.
 
Recent news that Chase Auto Finance and TD Auto Finance are looking to trim their dealership networks brought swift reactions of "Here we go again" from some members of the dealership F&I community.That more or less automatic response is based in part on the stereotype that banks move in and out of auto finance when it suits them.But it's a gross exaggeration to associate what the banks are do ...
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Long loans are a necessary evil, dealers say

Posted 12:01 am U.S. ET, Feb. 5
blogs Jim Henry is a special correspondent for Automotive News.
 
Everyone agrees that superlong loan terms are bad for the industry, but it seems no one wants to give them up first.Long loans -- between, say, 72 and 84 months or even longer -- likely will leave customers upside down at trade-in time, owing more on their car than it's worth. Brand loyalty and dealership loyalty fall off at the end of an extremely long loan term, experts say."Long-term financing ...
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Flawed study has lessons for F&I managers

Posted 12:01 am U.S. ET, Feb. 5
blogs News Editor James B. Treece oversees Automotive News' coverage of auto retailing.
 
There’s a lot not to like about a new study on discrimination in car loans. But there also are a few nuggets in it that indicate problems in the F&I office.The study is titled “Non-Negotiable: Negotiation Doesn’t Help African Americans and Latinos on Dealer-Financed Car Loans” and was conducted by the nonprofit Center for Responsible Lending in Durham, N.C.As reported i ...
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The flat fee misconnect

Posted 12:01 am U.S. ET, Jan. 29
blogs Jim Henry is a special correspondent for Automotive News.
 
The Consumer Financial Protection Bureau and dealers are talking past each other about flat fees.The CFPB keeps going out of its way to tell auto lenders and dealers that the CFPB isn't insisting on flat fees.However, in opposing the CFPB's campaign against dealer reserve, the National Automobile Dealers Association has jumped on flat fees as the CFPB proposal dealers love to hate."The problem wit ...
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Biggest F&I buzzword at NADA? Compliance

Posted 12:01 am U.S. ET, Jan. 22
blogs Jim Henry is a special correspondent for Automotive News.
 
It looks like compliance will be the No. 1 topic at the National Automobile Dealers Association convention in New Orleans this weekend, judging from the many F&I workshops, trade show displays, and all manner of sales pitches scheduled to take place.The Consumer Financial Protection Bureau, which is campaigning against dealer reserve, is behind much of this interest, of course. Dealer reserve, ...
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For Ally, a sting but no big bite

Posted 12:01 am U.S. ET, Jan. 15
blogs Jim Henry is a special correspondent for Automotive News.
 
Ally Financial Inc.’s $98 million consent order with the Consumer Financial Protection Bureau and U.S. Justice Department in December had to sting. But the payment is likely to amount to less than three months’ worth of the company’s 2013 earnings.Ally said last week it expects fourth-quarter 2013 net income of $90 million to $110 million. It also said it would book a $98 million ...
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Think the CFPB’s tough? It’s not the only one

Posted 12:01 am U.S. ET, Jan. 8
blogs Jim Henry is a special correspondent for Automotive News.
 
Dealers ought to take a look at a proposal from a consumer advocate group in California that would prohibit “dealer markup.”The group, Consumers for Auto Reliability and Safety, based in Sacramento, is trying to get a bunch of restrictions on dealerships on the state’s November 2014 ballot. Besides the “markup” proposal, the group would also prohibit so-called yo-yo f ...
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2013 was a banner F&I year

Posted 12:01 am U.S. ET, Jan. 2
blogs Jim Henry is a special correspondent for Automotive News.
 
2013 was a great year for F&I, judging by the performance of the six big publicly traded new-car dealership groups.As a group, the publics averaged $1,214 in F&I revenue per vehicle in the third quarter of 2013, the last quarter for which numbers are available. That was up from $1,154 a year earlier. The six largest public retailers, ranked by 2012 new-vehicle retail sales, are AutoNation ...
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Ally, more independent, can better focus on dealers

Posted 12:01 am U.S. ET, Dec. 26
blogs Jim Henry is a special correspondent for Automotive News.
 
It's time to stop thinking of Ally Financial as GM's captive finance company and get used to the fact that it's an independent bank.It was natural to hold on to the notion of Ally as a captive. The company, named Ally Financial Inc. in 2010, is the rebranded GMAC Financial Services. Although General Motors spun off majority control of GMAC in 2006, for the next few years GMAC still looked and acte ...
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F&I and the female work force, what an attraction

Posted 12:01 am U.S. ET, Dec. 18
blogs Jamie LaReau covers the automotive retail beat for Automotive News.
 
Of all dealership departments, the F&I office has the highest percentage of women in key positions.About 19 percent of all F&I managers are women, says Ted Kraybill, president of DeltaTrends, a Largo, Fla.-based research and consulting firm focused on hiring and retention in the auto industry.That might not seem like a lot of women, but compare that to dealerships’ sales departments. ...
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To sell service plans, remind customers about insurance hikes

Posted 12:01 am U.S. ET, Dec. 18
blogs Jim Treece is news editor for Automotive News.
 
Here’s a good reason for your customers to buy extended service contracts: to avoid hikes in their regular auto insurance.We all know that, but here’s additional evidence to cite.Drivers pay an average of 38 percent more for car insurance after making a single claim, a new study by insuranceQuotes.com found. The size of the premium hike varies by state, with Massachusetts drivers payin ...
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Pony car offers plenty of F&I opportunities

Posted 12:01 am U.S. ET, Dec. 11
blogs Jim Henry is a special correspondent for Automotive News.
 
Ford brand salespeople will find a lot to like in the redesigned 2015 Ford Mustang. So will Ford F&I managers.Ford salespeople will appreciate, and tout to customers, how the Mustang saves gas, with the optional EcoBoost engine; handles more like a sporty European car, with a multilink rear suspension; and serves as a halo car for the entire Ford brand. Hey, it even has a chance to take on the ...
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Enjoy the carve-out, dealers, while it's on the table

Posted 12:01 am U.S. ET, Nov. 27
blogs Jim Henry is a special correspondent for Automotive News.
 
While carving their turkeys this Thanksgiving, dealers can be thankful franchised new-car dealerships were carved out of the Consumer Financial Protection Bureau's jurisdiction after intense lobbying by the National Automobile Dealers Association.The value of that carve-out seemed a bit diminished lately. Earlier this year the CFPB started leaning on lenders to micromanage dealership pricing on de ...
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‘Disparate impact’ theory must wait for day in court

Posted 12:01 am U.S. ET, Nov. 20
blogs Jim Henry is a special correspondent for Automotive News.
 
Opponents of the “disparate impact” theory, which the Consumer Financial Protection Bureau is employing to prove discrimination in auto finance, were hoping the theory would get its day in court next month before the U.S. Supreme Court -- and lose.But the town council of Mount Holly, N.J., voted last week to settle a housing discrimination lawsuit that would have tested the disparate i ...
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