2013 Buy Here Pay Here Dealer Confrence | Auto Portfolio

2013 Buy Here, Pay Here Dealer Conference

May 21 -23

Las Vegas, NV

 

The 2013 Dealer Academy will provide in-depth dual-track training for operators who are new to the industry and for experienced operators seeking to improve their profits and cash flow.

 

Workshop Sessions

 

Accounting / Tax Update

Capital - Lines of Credit / Floor Plans

Capital - Selling Contracts

Compliance Moves to Make Now!

Finding the Best BHPH Customers

Getting More from DMS Systems

Helping New Customers Navigate the Digital Maze

Inventory Acquisition Tips & Techniques

Maximizing Recoveries

Payment Devices - What You Need to Know

Social Media

Understanding Credit Reports
Understanding the BHPH Vehicle Marketplace

Integrating Special Finance with BHPH

 

For more information visit www.bhphinfo.com

 

We Turn Auto Notes Into Cash!

Need Cash for new invntory, give us a call and let us show you how easy it is to

"Turn Auto Notes Into Cash!"

Sell some of your auto portfolio to increase your cash flow, buy more inventory.

 

Call today

615-414-6708

Helping dealers with their cash flow since 2000

 

 

 

NABD Adds Texas Legend Ingram to Hall of Fame

A ceremony during the NABD East Coast Conference to enshrine the newest member of the alliance's Hall of Fame turned back the clock on the buy-here,
pay-here industry to a time of  handshake contracts and Southern hospitality.

The National Alliance of Buy-Here, Pay-Here Dealers posthumously welcomed Martin Ingram to its Hall of Fame. Ingram started in the business back in 1958, establishing what now is Auto City, a BHPH company with three locations in Dallas.

Alliance executive Ingram Walters introduced the new Hall of Famer, who died on Sept. 9, 2010.

Click here to read the rest of the story.

We Turn Auto Notes Into Cash

Best Prices Fast Funding

Call Us today

615-414-6708

Beggs: ‘Normal’ Doesn’t Describe Close of 2012 Wholesale Market

Along with offering his thoughts on what this year might hold, Black Book’s Ricky Beggs didn’t use the term “normal” to describe the closing of 2012.

In his first online video analysis of 2013, Beggs told dealers that “throughout these party-filled holidays and a couple of slightly shortened work weeks, I must tell you that from our auction attendance at both physical and online auctions, the facts presented by the data we have recently received and the comments from the dealers we have talked with recently, the market would not be described as normal in relation to the December activity of the past few years."

In continuing his commentary contained in the latest episode of “Beggs on the Used Car Market,” the managing editor highlighted trends that’s been going for the past six weeks.

“The percentage of adjustments requiring raises to the most recent published values has been at levels we have only seen after the calendar has turned to the first quarter of a fresh year,” Beggs said. “The initial push of strength we believe was a result of additional vehicles needed to replace many of those damaged during Hurricane Sandy.

“The most recent strength has to be the overall pent-up demand bringing forward an early spring market,” he continued. “Consumers have put off buying their next new or used car as long as they can or at least want to. Their current car is old and consumers want to move forward now that the election issues are behind us with only the fiscal cliff still hanging over our heads.”

During the past six weeks, Black Book found the increases amounted from a low of 31 percent of the adjustments to a solid 50 percent this past week for a 39-percent average during this period.

Looking next at specific vehicle segments, editors found that the average truck segment price change produced a $5 gain, fueled by the strength of full-size vans. Among the units, passenger versions moved up $74 while cargo models jumped by $56.

While not to the vans’ level, Black Book discovered several other truck segments posted price climbs last week, including full-size pickups (up $5), compact pickups (up $3) and compact crossovers (up $3).

Meanwhile on the car-segment side, overall prices slid $37, the smallest average decline during the past five weeks and the second smallest decline since the week ending June 15.

Even with the national average gas prices at the pump at $3.26, only 1 cent above the low point of the last year, editors noticed the three smallest cars in physical size that offer the most fuel efficiency also boast the most stable values within the car segments. Black Book found entry level cars softened by just $1 while compact cars (down $5) and entry midsize cars (down $6) didn’t drop by much.

“The better equipped entry type cars are helping make these segments more enticing as consumers are not having to give up all the creature comforts with today’s smaller vehicles,” Beggs said.

Beggs wrapped up his latest analysis by looking ahead.

“If history is an indicator, the market should continue to show stability and maybe even a little strength,” he said. “The past four weeks during December with positive changes averaging 40 percent, almost one year ago during January 2012, the four-week positive changes averaged 48 percent.”

View the original article here

sell auto notes

Analysts Predict Robust New & Used Market Growth for New Year

A new year has begun, and predictions for a prosperous year for the country's new- and used-car markets are pouring in. Factors such as increases in available trade-ins and high demand are expected to boost used sales, while numerous redesigns may ramp up the new market.

According to a study released from Indian firm Ken Research titled, “The US Used Car Market Outlook 2016 - Driven by Late Model Used Cars,” the nation’s used-car market revenue is expected to reach close to $480 billion by 2016.

Providing some background to these numbers, officials pointed out that in 2006, as the economy began to slow down, used market revenue came in at $340 billion and grew less than 1 percent during 2006–2011.

What is pushing this expected boost?

The report cited the “high average prices of used cars” as the main factor behind this growth.

“Average prices of used cars, price of gasoline and diesel, improvement in the access to F&I services, increased sales of new cars which will ensure the availability of late-model used cars, consumer confidence will drive the U.S. used-car market in the future,” the firm’s research analysts further explained.

The company also predicted that hybrid used vehicles will continue to gain market share.

And with new light vehicle registrations in the U.S. in 2013 expected to rise 6.6 percent over 2012 levels to 15.3 million vehicles, according to Polk, a boost in trade-in rates may bode well for the used market, as well.
“Used-car sales and new-car sales are complementary in nature, if the prices of one incline the other kind will also follow suit. Sales of new cars will determine the size of future used car inventory,” Ken Research shared.

 Breaking down Polk’s analysis in greater detail, the company also expects production rates to jump, increasing to the 15.9 million unit range (an anticipated 2.4 percent increase from 2012), driven by an improving economy and capacity expansion in the region.

In fact, consumers and dealers in the U.S. may be on board for an exciting year in the automotive world. According to Polk, new-vehicle introductions in 2013 will increase significantly, with 43 new vehicle introductions in the U.S. planned for the year, up nearly 50 percent over 2012 levels.

Moreover, over 60 vehicle redesigns are expected to hit the lots in 2013, according to Polk.

“Polk expects continued recovery in the industry in 2013 and 2014, a positive sign for the U.S. economy,” said Anthony Pratt, director of forecasting for the Americas at Polk. 

“The auto sector is likely to continue to be one of the key sectors that lead the U.S. economic recovery, however, we don't expect to realize pre-recession levels in the 17 million vehicles range for many years. However, our baseline forecast hinges on Washington's ability to draft a budget plan that will avoid $600 billion in spending cuts and tax increases,” he continued, noting decisions in Washington may play a key role in how the automotive industry continued recovery pans out.

Polk also is predicting that the U.S. automotive market will return to pre-recession production rates by 2016. The company shared it expects a return to 16 million units in the U.S. by 2015 at the latest, a rate last achieved in 2007.

View the original article here

sell auto notes

Calif. BHPH Bill Heads to Governor’s Desk; Two Others Inch Closer

Calif. BHPH Bill Heads to Governor’s Desk; Two Others Inch Closer
Three bills aimed at buy-here, pay-here dealers move closer to becoming law. Assembly Bill 1447 gains approval from both houses and awaits the Gov. Jerry Brown’s signature, while AB 1534 and SB 956 head back to their respective houses for concurrence votes. Read Full Story

We Turn Auto Notes Into Cash!

Polk: Commercial Registrations Decline in 1Q; New Sales VP Named

A shortage of used commercial vehicles could be impacting the industry according to the latest analysis by Polk, with registrations down across all used gross vehicle weight sectors.

On Wednesday, Polk reported that used commercial vehicle registrations (GVW 3-8) declined by 26.7 percent to 164,024 units in the U.S. during the first quarter of 2012, compared to the same period in 2011.

“While used-vehicle registrations remain strong, the long awaited decline in used commercial vehicle registrations as seen in the past two quarters may indicate that a shortage of good, clean available units could finally be upon us,” said Gary Meteer, account director for commercial vehicle solutions at Polk.

During the 2012 calendar year, a record 791,288 used commercial vehicle registrations were reported, representing a 17.7 percent increase from the number reported during the 2011 calendar year.

“With the first quarter complete, it is hard to believe that the total number of used registrations during 2012 will meet or beat the record levels seen in 2011,” Meteer added.

The numbers do not indicate a lack of confidence in the used commercial truck market, he noted, but do indicate that the continued growth experienced since the 2008 calendar year will likely not continue through 2012.

Used commercial vehicles represented 55.9 percent of total commercial vehicle transactions in the market during the first quarter, down from 70 percent during first quarter 2011.

Combined with 129,755 new registrations of GVW 3-8 vehicles over the same time period, overall commercial vehicle transactions in first quarter 2012 were down 10 percent from the same quarter last year.

The decreases were larger in some other GVW sectors year-over-year, with declines ranging from 46.4 percent for GVW 7 vehicles to a decline of 18.6 percent for GVW 3 vehicles.

As for GVW 8 vehicles, Meteer said, “One of the most frequently watched and analyzed activities in the commercial vehicle market is the number of used registrations for GVW 8 vehicles. The used registrations of GVW 8 vehicles were down 27.6 percent from the level achieved during the first quarter of the 2011 calendar year.”

GVW 8 used-vehicle registrations during the first quarter this year accounted for 39.8 percent of total used transactions compared to 38.6 percent last year, 47.6 percent in 2010 and 41.2 percent in 2009.

Criteria for the Polk analysis summary require that both the business name and the business address on the vehicle registration must have changed from the previous owner. Information supplied by each state’s Department of Motor Vehicles is also utilized.

New VP Named

In other news from Polk, the company has promoted Brad Korner to the role of vice president of sales and client services for Automotive Retail Solutions and Media.

“We are excited to welcome Brad to this role,” said Kendra Rawls, senior vice president of global sales and marketing at Polk. “His proven track record and extensive industry experience, combined with his strong focus on customer relationships, will serve as a great asset to Polk customers and prospects.”

Korner has been with Polk since 2004, and is a 30-plus-year customer relationship management veteran. He previously served as director of sales and client services for the ARS group.

Prior to joining Polk, Korner spent nearly 24 years with Reynolds and Reynolds.

View the original article here

sell auto notes

NCM Celebrates First Graduating Class of General Management Executive Program

The auto industry has a new group of leaders celebrating their success as the first-ever graduates of a new management training program.

Students of NCM Associates’ General Management Executive Program for franchised dealers celebrated their graduation on Wednesday.

“I am very proud of each one of today’s graduates; they have worked diligently to balance the rigors of professional study with their day-to-day dealership duties through the 11 months of this program,” said Garry House, director of the NCM Institute Center for Automotive Retail Excellence.

“I am certain they will all find great success in their retail automotive careers, and I applaud their dealership principals for the investment they’ve made in their students’ success.”

Student Tarik Shapli from Audi Wynnewood is among the inaugural class.

“This course provides a great overview of a general manager’s area of responsibility, and then backs it up with a lot of detail regarding the measurement, performance and improvement of each department,” Shapli said.

The General Management Executive Program curriculum is designed to give students the knowledge and skills necessary to successfully manage a dealership, including balancing the industry’s volatility and the many operational decisions that drive dealership profitability.

The program consists of a series of sessions conducted over the span of 11 months, held at NCM Institute training headquarters and led by NCM’s faculty of industry veterans.

“It’s vital these students have a faculty comprised of industry experts and veteran automotive retail executives to guide them,” stated House. “Our instructors are highly experienced retail managers who, as well as their positions on the NCM Institute faculty, are also actively working in dealerships with their clients. They bring deep, real-world retail automotive management experience to the classroom.”

Paul Faletti, Jr., NCM's president and chief executive officer, congratulated the graduates via a special video announcement, encouraging them to put the principles learned to good use in their respective dealerships, and to be open to innovative approaches and technologies without abandoning fundamental best practices.

The next class of the General Management Executive Program is set to kick off in August. For more information, visit www.ncm20.com.

View the original article here

sell auto notes

Beige Book: Used Market Consistently Strong

The overall retail sales market for dealers examined by the Federal Reserve in its most recent reporting period appeared fairly positive, and for the districts sharing insight on used-vehicle sales, the environment is a solid one.

In its latest Beige Book report, Fed pointed out rather stable used-vehicle sales, as well as a robust new-car market.

“New-vehicle sales remained strong and inventories of some popular models were tight. Sales of used automobiles held steady,” officials noted in the report.

Expanding upon this, the Fed added: “Automobile sales generally remained strong, although the pace of growth moderated in a few districts.

“Sales of used vehicles held steady, and a slight decline in prices was reported. Inventories of popular vehicles were tight,” it continued. “Outlooks were positive, and contacts across several districts expect steady growth in sales in coming months.”

While not all 12 Fed districts offered insight on their respective area’s used-vehicle market, the ones that did noticed dealers reporting good signs for their business.

In the Second District (New York), for example, dealers talked of a healthy used market.

“The used-car market continues to be strong and prices remain elevated, although dealers in the Buffalo area note some recent softening in prices at auction,” the Fed said of the Second District. “Wholesale and retail credit conditions remain favorable and continue to improve.”

Moving over to Cleveland, the Fed observed a similar trend in the Fourth District.

“Purchases of used vehicles were fairly steady year-over-year — inventories are building and prices declined slightly,” officials noted.

Sharing more auto-related insight, they added: “On the financing side, we heard two reports that banks are more willing to work with dealers. Leasing activity picked up. Dealers are investing in manufacturer-mandated facility upgrades and imaging programs. Hiring for sales and service positions continued, but at a very slow pace.”

In the Eighth District (St. Louis), the Fed gave a more concrete numbers breakdown of how both the new and used markets are faring. Among its data points, the Fed illustrated that a fifth dealers in the region saw used sales climb relative to new sales, and another fifth saw the reverse.

Lastly, the Fed shared some of its used-vehicle insight from the Twelfth District (San Francisco). It found that consumers here are still going after used vehicles, and with low inventory, this led to high prices.

“Demand remained strong for used vehicles and combined with tight inventories to keep prices elevated,” the Fed explained.

View the original article here

sell auto notes

Better Used-Car Buys Found in the Big City, New Study Finds

According to a new study, used-car deals get better — hundreds of dollars better — as ya shopper heads toward the big city.

In all but two states studied in CarGurus’ latest survey, dealers within a 50-mile radius of a major city center offer better deals on their used-car inventory than those located farther outside that metropolitan center.

How much better? Some of the best city savings were found in New Orleans, at $770, Las Vegas at $641 and Atlanta at $606.

In California, New York and Texas — the states in the study with the highest populations — CarGurus reports finding prices at city dealerships at more than $500 less than at suburban dealerships.

Overall, CarGurus analysts reported an average price difference of $345 between used-car listing in cities and suburban/rural used-car listings within the same state.

“If you are looking for the best deal on a used car, head for the city,” said Langley Steinert, founder and chief executive officer of CarGurus. “Our data shows that dealers located in populated metro areas tend to price their inventory more competitively than dealers located farther outside the city. For suburban car shoppers looking for savings, it’s worth expanding your search to include city dealerships.”

Only two states studied bucked the city savings trend, CarGurus noted: In Indiana and Arkansas, suburban/rural dealerships offered consumers, on average, better deals on used cars than dealerships within those states’ major metro areas.

For this study, CarGurus applied its car valuation models to compare prices on millions of used-car listings offered at dealerships in and outside the top 50 U.S. metro areas.

“City dealerships” were defined as those located within a 50-mile radius of a major city center.

“Suburban/rural dealerships” were defined as those in the same state that were located beyond the 50-mile radius of the major city centers.

View the original article here

sell auto notes

New York Chevy Dealer Scoops Up GM Remarketing's Milestone Ride

Todd Caputo wasn’t sure what exact model would roll down the lane Wednesday morning at Southern Auto Auction, but he knew he wanted it.

And fortunately for the Chittenango, N.Y., dealer, his bid for the 14 millionth vehicle ever remarketed by General Motors — a 2011 Chevrolet Equinox — was the winner.

“I was excited to buy the car. I wanted to be a part of history,” Caputo told Auto Remarketing by phone Wednesday afternoon on his way back from the East Windsor, Conn., auction.

“I kind of stood outside the overhead door, so I couldn’t really tell exactly how many people were bidding on it. I could just see hands, but I couldn’t see faces,” the owner of Sun Chevrolet, Inc. added, noting that the bidding was “pretty active.”

As Caputo, GM and Southern AA celebrated this landmark sale, Dan Kennedy — manager of GM Remarketing — also shared his perspective with Auto Remarketing on Wednesday afternoon, not long after the vehicle was sold.

“When you start thinking about the number of vehicles that have gone before us … this really demonstrates the commitment we’ve got to our dealers, to be able to provide them with good quality used vehicles,” Kennedy said.

“One of the biggest (profit centers) is used cars,” he added. “Plus, this is also a feeder, if you would, for our certified pre-owned programs. It’s a great for our dealers to stay in the used-car business and get the quality of products they need in order to service the customers.”

There was not any specific numbers available as to how many of these 14 million remarketed vehicles have made their way into the GM Certified program, as these figures tend to fluctuate year to year, Kennedy explained.

However, it certainly has served as CPO supply stream.

“I think you can safely say that a fairly significant percentage of our vehicles that we sell at the auctions find their way into the certified program,” he noted.

Adding some more perspective from the certified side, Larry Pryg — national manager of Certified Pre-Owned Vehicles at GM — said:  “This GM Remarketing milestone speaks to the quality of our products and the success of our auction partners and Certified Pre-Owned dealers. Our Certified Pre-Owned dealers acquire a portion of their inventory from these auctions, and because of their success, our customers have a more robust vehicle selection.”

More Details on Landmark Sale

Sharing more about the sale, Caputo said he bought the vehicle around 10 a.m. EST.  The auction had a sign on top of the vehicle and an announcement was made about it being the landmark vehicle.

"They had the car wrapped up, so I didn't know what it was going to be prior to coming in," he noted.

Caputo learned this milestone vehicle — which had been a company car — would be at the sale after being contacted by the auction and invited to the sale. Having been an SAA customer for roughly 20 years, Caputo said this was a sale he attends anyway.

View the original article here

sell auto notes

Preferred Warranties Marks 20th Anniversary by Revealing Continued Sales Revenue Jump

Wayne Herring Jr., Preferred Warranties

Extended service contract provider Preferred Warranties began its 20th anniversary celebration this week by highlighting a 29-percent increase in sales revenues last year, coming on the heels of a 16-percent jump during 2010.

PWI national sales manager Wayne Herring Jr. declared, “2010 was strong, 2011 was even stronger.

“The new plans and dealer programs that we introduced last year have been extremely well received,” Herring continued. “We’re opening up new territories, and we have built the best customer service and sales team in the business. The long and short of it is that we have a lot to celebrate.”

Last year, the company introduced a new high-end protection plan, an online contract entry tool for dealers, new Spanish sales literature and expanded dealer rebate incentives.

PWI also introduced its Premier Plan, offering coverage on a wider range of parts and service needs including many new high-tech systems and components.  

“The coverage is so extensive that we’ve gone to an exclusionary contract,” Herring pointed out. “It lists the few items not covered by the Premier Plan. If a component or problem is not on that list, this plan covers it.”

The company also invested heavily in support and technology for dealerships that carry Preferred Warranties.

In June, PWI introduced eContract, an online program that can allow dealers to instantly compare, present and submit service contracts on virtually any vehicle.
“The speed and simplicity of Preferred’s online contract program are amazing,” stated Mike Bowers, of John’s Great Cars in Reading, Pa.

“In less than a minute I can enter the information on any vehicle, calculate all of the service contract options, and have it presentable for the customer on a single page,” Bowers added.

Last summer, the company also introduced new Spanish versions of marketing and sales materials.

“To my knowledge, Preferred Warranties was the first provider of aftermarket vehicle protection plans to make a focused effort on hiring bilingual claims reps,” noted Greg Reyes, one of PWI’s full-time bilingual customer service reps.

“The management team is committed to recruiting, training and maintaining the best bilingual staff in the business,” Reyes emphasized.

Celebrating aside, Preferred Warranties stressed it won’t be resting on its laurels. The company’s plans for 2012 include a new e-tablet app that can enable dealers to instantly customize and compare finance and insurance products for customers.

Herring insisted the company’s solid record of growth has come since its founding in 1992.

In 1998, Preferred Warranties was ranked No. 179 on the Inc. 500 list of fastest growing U.S. companies and earned a Torch Award for Marketplace Ethics from the Better Business Bureau. Today Preferred Warranties protection plans are insured by an A.M. Best “A-” underwriter, and offered through dealerships in 17 states. The company is rated “A” by the Better Business Bureau.

Preferred Warranties extended service contracts are available through dealerships in 17 states, including Alabama, Delaware, Georgia, Indiana, Kentucky, Maryland, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia.

View the original article here

sell auto notes

Benefits of Factoring Receivables

If you sell goods or services to commercial or government accounts you are very familiar with the fact that you have to offer your clients 30 to 60 days to pay their invoices. However, offering 30 day payment terms can be very challenging for business owners who must cover all the business's expenses while they wait to get paid. This quickly eats up any cash reserves and puts the business in a challenging position. Unfortunately, when it comes to getting paid, hurry up and wait seems to be the name of the game.

But there is a solution to this problem that you won't find at your local bank. It's called accounts receivable factoring. It has the following benefits:

1. It gets your invoices paid in 24 hours, eliminating long payment waits

2. Factoring is easy to obtain

3. Setting up an account takes just a couple of days

Although factoring provides your business with working capital, it is not a business loan. It is an advance on your outstanding invoices. Because of this, factoring invoices is easy to obtain provided that you do business with reliable customers. Furthermore, invoice factoring easily integrates into your company. It works as follows:

1. You deliver the goods or services and invoice your client

2. You send the invoice to the factoring company, who advances you up to 85% of your invoice as a first installment

3. You get to use the funds to pay business expenses, while the factoring company waits to get paid by your client

4. Once the factoring company gets paid, it rebates the remaining 15% as a second installment, less a small service fee

Factoring service fees vary based on a number of variables, such as monthly factored volume and how long it takes for an invoice to get paid. Based on these, fees can range from 1.5% to 6%. Generally speaking, factoring is very affordable if your clients pay their in 45 days or less.

Factoring invoices is a great alternative for startups and established companies that have exhausted their bank resources. It's a flexible product that is tied to your sales performance, this means that you will not get a fixed line. If your sales increase, so does your financing. This makes receivables factoring, an ideal product for growing companies.

Why bankrupt consumers make good prospects

Jim Henry
Automotive News -- March 7, 2012 - 12:01 am ET

It may sound counterintuitive, but customers fresh from bankruptcy or whose cars are being repossessed can be highly desirable customers for lenders and dealers, say two companies that cater to what's politely known as the BK market, short for bankrupt.

That's because close to 40 percent of the customers who can be identified from publicly available U.S. Bankruptcy Court records buy a car within 30 days after their cases are discharged, according to OnlineBKmanager.com of Chandler, Ariz.

"Our focus is to work directly with franchised new-car dealers," said Robert Davies, company president, in a phone interview earlier this year.

The company mines court records to identify people who are approaching the point where they can buy a car again. Dealers and lenders can buy those leads and the company sends direct-mail pieces to the customers. OnlineBKmanager.com has about 800 dealers signed up and a growing number of lenders, Davies said.

For instance, the company announced in February that it had signed up with Prestige Financial Services, a subprime auto lender owned by Utah-based Larry H. Miller Group of Companies.

Tim Condon, CEO of Leap Financial, said in a recent interview that many of the customers who are in repossession or who go bankrupt have had a good credit history in the past.

"Probably half our portfolio are consumers who were prime customers prior to the recession and just hit a bad patch," he said.

Leap Financial buys cars from lenders that are in the process of repossessing them. The company leases them back to the same owners for a lower monthly payment. The lender gets more than it would if it auctioned off the car. The customer gets the car back -- with a GPS-based starter-interrupter that disables the car if the customer misses a payment.

Said Condon: "We get shockingly good results."

You can reach Jim Henry at autonews@crain.com. Readers are solely responsible for the content of the comments they post here. Comments are subject to the site's terms and conditions of use and do not necessarily reflect the opinion or approval of Automotive News. Readers whose comments violate the terms of use may have their comments removed or all of their content blocked from viewing by other users without notification.

View the original article here

We Turn
Auto Notes Into Cash!


Autobulk.com

Ally CEO: We have only 1 business -- auto

Jim Henry
Automotive News -- May 23, 2012 - 8:14 am ET
Ally Financial CEO Michael Carpenter: "We will reduce our cost of funds over time. We will free up capital. This will result in an even stronger auto franchise."

Ally Financial Inc. has one focus now, CEO Michael Carpenter says: U.S. auto lending.

That auto emphasis, in fact, is one of the reasons Ally's ailing mortgage unit, ResCap, filed for bankruptcy protection last week, he says.

As of the first quarter, Ally had relationships with nearly 14,000 U.S. dealerships, an increase of about 1,000 from a year earlier. Ally's biggest customers are General Motors and Chrysler Group. Ally is the preferred lender for both manufacturers.

Carpenter spoke about Ally's auto lending business last week with Automotive News Special Correspondent Jim Henry.

You've compared Ally to "category killers" in other industries. Your categories are auto lending and online banking. So ResCap was in the way?

We only have one business. It's a big business, and that's the auto franchise. Ally Bank is a very important part of how we finance it.

What makes Ally different from other banks?

Most banks, if you want subprime, they might say, "On Mondays, Wednesdays and Fridays, we do subprime; on Tuesdays and Thursdays, we do prime" or whatever. That is, when the market is good. But we're there every day.

But you're keeping your U.S. insurance operation, which includes extended-service contracts and other insurance-like F&I products.

Yes, we are. We believe in offering our dealer customers every financial product they need. We finance the entire credit spectrum. We offer leases and loans. We run auctions. We insure vehicles on the lot. We offer insurance products they can sell to their customers.

What's in it for dealers? Is it that if you can lower your cost of funds, you'll be able to offer lower rates?

It really is just about that straightforward. ... We will reduce our cost of funds over time. We will free up capital. This will result in an even stronger auto franchise. ... The reason ResCap went bankrupt, the reason we're selling the international operations, is to make the U.S. business even stronger.

You can reach Jim Henry at autonews@crain.com. Related LinksReaders are solely responsible for the content of the comments they post here. Comments are subject to the site's terms and conditions of use and do not necessarily reflect the opinion or approval of Automotive News. Readers whose comments violate the terms of use may have their comments removed or all of their content blocked from viewing by other users without notification.

View the original article here

We Turn
Auto Notes Into Cash!


Autobulk.com

Auto-loan delinquency rates plunge

Auto-loan delinquency rates in the United States have fallen to their lowest point in at least a dozen years, according to risk management firm TransUnion.

The percentage of borrowers who are at least 60 days past due on their vehicle payments fell to 0.36 percent in the first quarter of 2012, TransUnion says. That's the lowest rate since the firm started reporting the data in 1999.

Compared with the first quarter of last year, delinquency rates dropped almost 27 percent from 0.49 percent . From the fourth quarter of 2011, rates fell nearly 22 percent from 0.46 percent.

"Auto loan delinquencies continue to perform exceptionally," said Peter Turek, automotive vice president of TransUnion's financial services unit, in a statement.

Turek said he expects auto-loan delinquencies to remain low for the rest of 2012 because rising U.S. demand for new and used vehicles has spurred an increase in lending and leasing.

Still, Turek cautioned that "a slight increase from this record-low level would not be surprising and should not be construed as a negative event, as lenders continue to originate more loans to consumers across all credit risk levels."

Auto delinquency rates dropped in 43 states from the fourth quarter of 2011 to the first quarter of 2012, TransUnion reported. Last quarter, Montana had the lowest loan delinquency rate in the country at 0.15 percent. Mississippi, with a 0.77 percent delinquency rate, was the highest in the nation.

You can reach Joseph Lichterman at jlichterman@crain.com. Related LinksReaders are solely responsible for the content of the comments they post here. Comments are subject to the site's terms and conditions of use and do not necessarily reflect the opinion or approval of Automotive News. Readers whose comments violate the terms of use may have their comments removed or all of their content blocked from viewing by other users without notification.

View the original article here

We Turn
Auto Notes Into Cash!


Autobulk.com

Subprime tarnish fades, finally

Jim Henry is a special correspondent for Automotive News

Dealers have complained for a couple of years now about how long it's taking for subprime auto lending to bounce back.

Sure, the U.S. economy isn't growing as fast as we'd all like. But really, what's taking so long?

How about tarnish by association?

Part of the problem is that ever since the subprime-mortgage collapse, some investors can't bring themselves to buy anything with the word "subprime" in it, said John Di Paolo, principal of structured finance research at Prudential Investments. Di Paolo spoke last week at a conference sponsored by Standard & Poor's Ratings Services.

"Some investors, I don't think, will ever come back to subprime," he said. That's despite the fact that subprime auto loans performed pretty well through the recession and performed a much better than mortgages.

"People don't differentiate," he said.

While some investors have been turned off forever, the good news for dealerships is that many investors are now pouring money into subprime lenders, which the lenders are using to make new loans and grow again. Subprime accounted for 41.5 percent of U.S. loan and lease originations in the fourth quarter last year, up from 38.4 percent the year before, Experian Automotive says.

All indications are that the first quarter this year followed the same pattern, with an increase in subprime share.

Finally, subprime loans are starting to catch up.

You can reach Jim Henry at autonews@crain.com.

Related LinksReaders are solely responsible for the content of the comments they post here. Comments are subject to the site's terms and conditions of use and do not necessarily reflect the opinion or approval of Automotive News. Readers whose comments violate the terms of use may have their comments removed or all of their content blocked from viewing by other users without notification.

View the original article here

We Turn
Auto Notes Into Cash!


Autobulk.com

Chief consumer watchdog takes stage, stays mum on auto lending

Jim Henry is a special correspondent for Automotive News

It's too bad that the head of the Consumer Financial Protection Bureau, which prides itself on enforcing transparency in the finance industry, is opaque about its plans for the auto-lending segment.

Apparently, auto lenders and the franchised, new-car dealers they do business with are just going to have to wait and see, even though that's not the answer anybody wants.

At last week's Consumer Bankers Association convention in Texas, Richard Cordray, CFPB director, stuck to his prepared remarks. He didn't even mention the word "auto," although he did mention mortgages, credit cards, student loans and checking accounts.

The Consumer Financial Protection Bureau hasn't gotten around yet to any specific public statements on auto lending. That has done nothing to calm high anxiety among auto lenders and dealers about whether the bureau or other government regulators, such as the Federal Trade Commission, will review the common practice of dealer reserve on indirect auto loans.That's where dealers in effect mark up the customer's interest rate and share in the profits.

As Cordray headed for the exit at the convention, I asked him whether he could talk about the auto sector in general or specifically about dealer reserve. "I respect your right to ask," he said, "but I don't have any news to make on that today."

To be fair, the bureau is still new, and Cordray is newer still, having been appointed in January. Moreover, when the bureau was created in 2010, dealerships were specifically carved out of its jurisdiction. That potentially complicates any rules the bureau might contemplate regarding dealer reserve. Technically, any rules would be for lenders, not dealers.

Still, it was a disappointing appearance for anybody hoping for more details.

You can reach Jim Henry at autonews@crain.com.

Readers are solely responsible for the content of the comments they post here. Comments are subject to the site's terms and conditions of use and do not necessarily reflect the opinion or approval of Automotive News. Readers whose comments violate the terms of use may have their comments removed or all of their content blocked from viewing by other users without notification.

View the original article here

We Turn
Auto Notes Into Cash!


Autobulk.com

Bundling, dealer reserve may draw whistles on regulatory gridiron

Jim Henry
Automotive News -- March 28, 2012 - 12:01 am ET

Some items related to auto lending could come under scrutiny by government regulators, speakers at the Consumer Bankers Association convention in Texas said last week. And that could be cause for worry, they said.

1. Bundling: More F&I vendors and dealerships are packaging aftermarket products instead of pricing them individually.

Doug Ekizian, senior manager of the Consumer Finance Group at PricewaterhouseCoopers, said in a presentation on "enterprise risk management" that regulators might not like that.

"Aftermarket products should not be bundled in such a way as to obscure relative costs. ... The total cost of a product, including interest, points and fees, should be easy for a customer to understand," he said.

2. Customer complaints: The Consumer Financial Protection Bureau has launched a Web site, consumerfinance.gov/complaint/, for gathering consumer complaints about financing, including auto. But lenders say the auto finance complaint platform is overly broad. The CFPB has begun to exercise its jurisdiction over depositary institutions -- those offering checking and savings accounts -- but not nondepositary ones, such as captives and independent finance companies. Yet the site is open to complaints about all auto lenders. Lenders worry the site will attract complaints about companies the bureau isn't yet monitoring and can't do anything about. When those complaints aren't addressed, lenders fear consumers will blame them, not the bureau.

The CFPB hasn't said just how it will forward a consumer complaint to a lender that was the subject of that complaint.

"The list of complaints is building," Ekizian said. For example, he said, consumers have read about mortgage "modifications" to keep borrowers in their homes even when they're behind on payments. Some consumers are disappointed to learn auto lenders don't work the same way, he said.

Separately, the American Financial Services Association sent CFPB Director Richard Cordray a written complaint on March 13.

"When they created a credit card [complaint] platform, there was a lot of dialogue back and forth. We didn't see that" for autos, said Bill Himpler, AFSA executive vice president.

3. Dealer compensation: At roundtable discussions last year, the Federal Trade Commission heard repeated complaints about dealership scams such as "packing" cars with unwanted options and so-called yo-yo financing, in which the original deal falls through and the customer has to come back and sign a new and potentially more expensive contract.

Dealer reserve, in which the dealer arranges the financing and marks up the customer's interest rate to share in the profits, also came in for criticism.

Andy Koblenz, chief counsel for the National Automobile Dealers Association, said the industry has three good arguments why there's no need to create new regulations for some common complaints cited at the FTC roundtables:

• They're already illegal. This would apply, for example, to "packing" cars with unwanted options.

• They occur only rarely. For example, yo-yo financing. Consumer-advocate groups see this as a sneaky tactic to get more money. The industry sees it as a mistake most dealers probably prefer to avoid.

• They're based on old information. Overcharging for rustproofing was once a common complaint. Even though it's virtually unheard-of today, it still comes up as an example of shady dealer business practices.

None of those arguments applies to dealer reserve, though, Koblenz said. And that could make it a regulatory target.

"It happens all the time. Is it happening today? It is. Is it currently illegal? No," Koblenz said.

He said one legal argument in favor of today's dealer compensation is that it does no harm. If anything, he said interest rates on indirect loans negotiated by dealers are often lower than direct loans with no middleman.

You can reach Jim Henry at autonews@crain.com. Readers are solely responsible for the content of the comments they post here. Comments are subject to the site's terms and conditions of use and do not necessarily reflect the opinion or approval of Automotive News. Readers whose comments violate the terms of use may have their comments removed or all of their content blocked from viewing by other users without notification.

View the original article here

We Turn
Auto Notes Into Cash!


Autobulk.com

Learn how new U.S. rules will affect you

Automotive News -- May 23, 2012 - 12:01 am ET
Reynolds: Points out trouble spots

Auto dealers who have been watching regulatory developments will get some answers next month during Automotive News F&I Week -- a free online conference.

Carole Reynolds, a lawyer in the Federal Trade Commission's Financial Practices Division, will give examples of trouble spots in auto finance and leasing and explore topics from the FTC's roundtable last year on auto lending and related activities.

She will help dealers determine whether they're driving toward danger or steering clear of deceptive practices.

And Michael Benoit, a partner with the Hudson Cook law firm, will spell out what dealers need to know about the Consumer Financial Protection Bureau.

Although auto dealers do not fall under the bureau's direct jurisdiction, there are several ways the bureau can impact dealer behavior. Benoit will explore these issues and help dealers prepare for what may lie ahead.

Benoit: Preps dealers for future

Reynolds and Benoit will be part of a session called "Playing by the Rules -- Federal Regulation and Enforcement Workshop" on Wednesday, June 20, at 3 p.m. EDT.

The moderator will be Dave Robertson, executive director of the Association of Finance & Insurance Professionals, an Automotive News partner in the event.

Six F&I Week Webinars will be held, at 1 p.m and 3 p.m. on June 19, 20, and 21.

The event is designed for F&I managers and staff, dealer principals, general managers, sales managers and business development center personnel.

The sessions can be viewed live on attendees' computer screens or played back later on demand. To find out more about F&I Week or to register, go to fandiweek.com.

What: A free, online conference
When: June 19-21
Main events: Webinars at 1 p.m and 3 p.m. EDT daily
Sign up: fandiweek.com

Contact Automotive News

Related LinksReaders are solely responsible for the content of the comments they post here. Comments are subject to the site's terms and conditions of use and do not necessarily reflect the opinion or approval of Automotive News. Readers whose comments violate the terms of use may have their comments removed or all of their content blocked from viewing by other users without notification.

View the original article here

We Turn
Auto Notes Into Cash!


Autobulk.com

Lexus Explains How Two New Store Positions Are Targeting Better Customer Service

Lexus contends it is “raising the bar again” in regard to customer service by partnering with its franchised dealers to create two new certified store positions.

Announced Thursday, Lexus explained the vehicle delivery specialist (VDS) will introduce customers to their new units and review the features of each model.

Meanwhile, the brand highlighted the vehicle technology specialist (VTS) will serve as a resource for customers who have any questions about how to use the advanced functions of their vehicle, including the new Lexus Enform telematics system. 

Lexus group vice president Mark Templin reiterated that when the nameplate was established 23 years ago, it was dedicated to providing the best customer service experience in the industry. Templin stressed Lexus’ commitment to that goal is reflected in its top position in the J.D. Power and Associates Customer Satisfaction Index for 15 years, including the past four in a row.

The Lexus boss thinks these new dealership staff members can keep Lexus at its current customer service perch.

“With the advent of more technology in luxury cars, customers often have questions about their navigation system, establishing a Bluetooth connection for their phone or managing other telematics systems,” Templin explained.

“While we’re happy to answer their calls, we think it will be much more beneficial to have experts at our dealerships who can establish and maintain relationships with customers to answer any questions about their cars,” he continued.

With the launch of the new 2013 GS, brand executives said training for the VDS and VTS positions is now taking place across the country.

To emphasize the importance of these customer-facing positions, Lexus noted it is applying the philosophy of “takumi,” or master craftsman, to their jobs. Dealership associates are trained to treat customer service as a craft and are given advanced tools to help them go the extra mile with customers.

Lexus pointed out much of the training for the dealership associates is accessed through interactive iPad apps. The product information apps, including one specifically for the GS and also for Lexus Enform, include training exercises and are available for customers to download. Or, if a customer prefers, the individual can use iPad features like Facetime to contact their dealership and receive a remote personal tutorial in their vehicle. 

“Lexus customers are becoming more and more technologically savvy, and we want our dealership associates to be able to communicate effectively with them throughout the sales, delivery and ownership process,” shared Vince Salisbury, Lexus College dealer training manager.

“Customers can access the information on their own, come in to the dealership or contact their dealership via phone, e-mail or iPad to get the answers they need,” Salisbury added. “The idea is to give them what they want, when they want it and how they want it.” 

In addition to providing technical training, Lexus mentioned it is training dealership associates to recognize verbal and nonverbal feedback to customize each customer’s experience.

View the original article here

sell auto notes