Finance and Insurance

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 »

 

LETTER TO THE EDITOR

Can't judge client's ability to pay

12:01 am U.S. ET | Sept. 1, 2014
I learned many years ago that you cannot be a judge of your customer's financial ability to purchase a vehicle.... 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 »

 

CFPB takes new tack in auto lender crackdown

12:01 am U.S. ET | Aug. 25, 2014
The Consumer Financial Protection Bureau took a fresh approach to cracking down on auto lenders, citing one group for failing to furnish accurate customer data to credit reporting agencies.... 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 »

 

Asbury targets underperformers, training as F&I gains stall

12:01 am U.S. ET | Aug. 20, 2014
Asbury Automotive Group's improvement in average F&I revenues per vehicle retailed has stalled this year. Like other publicly traded auto retailers, Asbury plans to concentrate on squeezing improvements out of its bottom performers in F&I revenue per vehicle retailed.... Read More »

 

Subprime auto loan growth is 'less pronounced' in context, Fed analysts say

12:01 am U.S. ET | Aug. 20, 2014
While auto lending is rising in all credit categories, subprime auto loans are growing the fastest because that segment dropped the most during the downturn, according to a study by four analysts from the Federal Reserve Bank of New York.... Read More »

 

Honda's Mendel says U.S. sales 'near top,' warns market may suffer from 'stupid things'

1:30 pm U.S. ET | Aug. 19, 2014
Auto sales in the United States are approaching the highest levels that the market can sustainably support and could suffer long-term damage as automakers increasingly turn to subprime financing and seven-year loans to boost market share, the top sales executive at American Honda warned today.... Read More »

 

Dealer software giant ADP Dealer Services to become CDK Global

2:55 pm U.S. ET | Aug. 19, 2014
ADP Dealer Services said today it will spin off from parent ADP with the name CDK Global. The dealer software giant expects to become an independent public company by October. It will be listed on the NASDAQ exchange under the symbol CDK.... Read More »

 

U.S. Treasury to cut Ally stake

10:56 am U.S. ET | Aug. 14, 2014
The Treasury Department plans to cut its stake in Ally Financial by selling stock on the open market in its first divestiture since the company's initial public offering in April.... Read More »

 

Toyota: Favorable auto finance climate to continue driving U.S. retail volume

12:01 am U.S. ET | Aug. 13, 2014
An auto finance environment favorable to many U.S. consumers will continue to provide a tailwind for higher retail auto sales in 2014, a top Toyota executive said Tuesday.... Read More »

 

Subprime auto loans' risk is acceptable, analysts say

5:42 pm U.S. ET | Aug. 13, 2014
The rising number of subprime auto loans doesn't represent a disaster waiting to happen, akin to the mountain of subprime mortgages that went bad and set off the Great Recession, Moody’s says. Instead, the credit rating agency says subprime auto loans are performing as expected in terms of delinquencies or defaults, while allowing more Americans to buy a car or truck.... Read More »

 

JIM HENRY

N.Y. Times' demands are misguided

12:01 am U.S. ET | Aug. 13, 2014
Subprime auto loans have gotten most of the attention, but an editorial in The New York Times on Saturday makes other demands dealers and lenders are sure to dislike.... Read More »

 

NADA, AFSA dispute New York Times editorial on subprime auto loans

12:01 am U.S. ET | Aug. 13, 2014
Auto dealer and lender groups are howling in protest at an editorial in Saturday's New York Times that equated subprime auto loans with subprime mortgages. The groups insist there is no comparison between the two types of loans. At the same time, a recently disclosed U.S. Department of Justice investigation into subprime auto loans is very much part of the debate.... Read More »

 

Q&A

Flat fees for F&I products? It's possible

12:01 am U.S. ET | Aug. 13, 2014
It's a matter of "when" rather than "if" U.S. regulators will force auto lenders to switch to flat fees from dealer reserve, says John Pappanastos, CEO of EFG Companies, a major F&I administrator. Flat fees for F&I products could follow, he says. And if that happens, he says dealerships likely will reap lower revenues per vehicle and try to make up for it by selling F&I products to a greater share of customers.... Read More »

 

Subprime lender learns FTC's 'not cutting any slack'

12:01 am U.S. ET | Aug. 11, 2014
Subprime auto lender Consumer Portfolio Services learned some costly but valuable lessons from a $5.5 million consent order with the Federal Trade Commission this year.... Read More »

 

High-tech toys drive service contract sales

12:01 am U.S. ET | Aug. 11, 2014
In-vehicle, high-tech toys and consumers' urge to protect them are driving sales of extended service contracts, some finance and insurance professionals say.... Read More »

 

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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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