Size matters for captives
NEW YORK - Backed by huge parents, captive finance companies have a much brighter outlook than other auto lenders. That is according to two separate studies, released recently by Moody's Investors Service and Fitch IBCA Inc.
'They (captives) set the standards against which all independent auto lenders and banks must compete,' the Fitch study said.
The Moody's report predicted a large volume of off-lease vehicles; increased competition in nonprime; consolidation among small independents; continued deterioration in asset quality, because of factors like bankruptcies; residual losses; and loan losses. 'Auto finance profitability is on a declining trend,' Moody's said.
TITUSVILLE, Fla. - Smart Choice Automotive Group Inc. has more than doubled its line of credit with Finova Capital Corp. to $75 million from $35 million. The money will be used to expand the company's subprime business. Smart Choice, based here, operates 24 new- and used-car dealerships in Florida.
AUSTIN, Texas - Subprime auto lender AutoBond Acceptance Corp. reported a loss of $121,138 in the first quarter, vs. net income of $179,028 in the year-ago quarter.
AutoBond switched from NASDAQ to the American Stock Exchange in February.
AutoBond said its delinquencies declined in the first quarter of 1998. The company has begun servicing its own loans instead of using an outside vendor.
PROFIT UP 64%
SCHAUMBURG, Ill. - Insurance Auto Auctions Inc. said its first-quarter net earnings were $869,000, up 64 percent from the year-ago quarter. The company provides auto salvage and claims processing for totaled and recovered stolen vehicles.
The company also said it settled, for $700,000, a dispute with Bradley Scott, the former chairman who resigned earlier. Insurance Auto Auctions said it sold 115,000 vehicles in the first quarter, down 3 percent from last year.
LAS VEGAS - Uniprime Capital Acceptance Inc., a subprime lender, confirmed it has a private placement in the works and expects to go public in the next 30 days.
The company said that more than 2,000 dealerships use its 'OK Deal' program, for a separate subprime F&I department.