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Friday, June 08, 2012

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.

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Friday, June 01, 2012

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.

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Wednesday, February 22, 2012

CNW: Leap Year Bumps Up February Used Sales

It appears that the used-car market this month is getting a nice bump from 2012 being a leap year. Otherwise, CNW Research suggested February’s used sales would have been rather static this month.

Specifically, CNW is forecasting 1.95 million used sales for the month, an 8.1-percent hike from February 2011 on an unadjusted basis.

“Adjusted, however, sales would barely break even with last year,” noted CNW president Art Spinella.

Delving into more specifics, CNW believes franchised dealers will move 650,000 used units this month for a 5-percent year-over-year gain, while independents are projected to dip 4.2 percent with 640,000 used sales. The firm is predicting a 27.8-percent spike in private-party sales, which are forecasted at 658,000 units.

Breaking it down by segment, January showed larger segments grabbing more attention from consumers, CNW said. For instance, the market shares for small pickups (10.84 percent) and full-size pickups (13.06 percent) were either at or close behind the highest levels seen in two years.

Conversely, small car market share dropped dramatically.

But don’t count on these trends to last, Spinella said.

“Even under threat of higher fuel bills, consumers are still gravitating toward larger vehicles. Small cars, for example, took about 16 percent of the used market in January, down two full points from year ago and seven points lower than in September of last year,” he noted. “Expect that to change as gas prices move upward.”

He went on to point out: “This is a peculiar time of year for used-car sales, shifting to the warmer climates, which in turn, generates more larger-vehicle sales. The true test will be in April.”

Pent-Up Demand for Used Vehicles

While the leap year has brought seemingly stronger February sales, the number of buyers waiting in the wings to make a purchase has gone down.

CNW is anticipating pent-up demand in the used-car market will total approximately 83,500 shoppers. This compares to 94,000 used-car intenders in January and 92,000 in February 2011.

Put another way, pent-up demand this month is projected to be only 90.8 percent of its level a year ago. Meanwhile, in January, it was up 6.2 percent year-over-year.

“The average delay in making an acquisition among those who have postponed a purchase is around 2.4 months, statistically no different than it was in January but down from February 2011’s three months,” Spinella noted. The average delay in February 2011 was 3.01 months.

“And while it’s too early to make much of the data, the share of postponers who still plan to buy a used car has dipped to 94.9 percent, compared to 95.17 percent in January,” he added. “Much of that can be weather rather than economics at play, although the latter typically drives such intentions.”

Used Pricing

When it comes to the prices that used cars are fetching, conditions are much better than expected, Spinella noted.

For franchised dealers, February transactions prices are up 4.28 percent year-over-year at $11,090, which marks a 2.17-percent hike from January. Asking prices are up 3.21 percent year-over-year at $11,652. This represents at 1.19 percent sequential hike.

Independents have seen transaction prices average $9,784, which is up 10.93 percent year-over-year and 0.72 percent month-over-month.

View the original article here

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Saturday, February 11, 2012

Hezbollah laundered money with used-car sales, U.S. says

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Leasing rebounds, accounts for 1 in 5 sales

LAS VEGAS -- Leasing's share of U.S. retail sales rose by a point last year to 20 percent, according to the Manheim 2012 Used Car Market Report.

The report credits the industry for getting leasing right, at least "for the most part," by targeting lease consumers with good credit who trade their vehicles on a regular cycle. The industry also got praise for projecting end-of-lease residual values that were not overly inflated.

Despite what it calls an industrywide "conservative approach" to leasing, Manheim said leases rose 17 percent to 2.1 million units in 2011. That was 85 percent higher than the 1.14 million leases written in 2009, when large banks and finance companies had virtually abandoned leasing in the midst of the downturn. The figures exclude sales and leases to fleets.

The report, released Saturday at the National Automobile Dealers Association convention here, also notes that because fewer vehicles were leased during the recession, off-lease volumes will continue to decline this year. That decline is expected to contribute to tight supplies of fairly new, low-mileage used vehicles, which in turn should bolster used-vehicle prices.

You can reach Arlena Sawyers at asawyers@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.

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Thursday, January 05, 2012

Dealership tripped up by preprinted sales contracts with illegible due date

A Connecticut dealership is waiting to learn whether it will have to pay damages in a class-action lawsuit stemming from illegible sales contracts.

A federal judge in Bridgeport ruled last month that the dealership and its lender violated the Truth in Lending Act by using preprinted sales contracts that obscured the due date of borrowers' first payments. The suit involved 104 contracts.

U.S. District Judge Warren Eginton rejected the argument of defendants Key Hyundai of Manchester in Vernon, Conn., and Citizens Automobile Finance Inc. that they had acted in good faith and that any truth-in-lending technical violations resulted from a "bona fide error."

The suit was filed by Gail LeFoll, who bought a 2009 Sonata from Key in June 2009. The due date of LeFoll's first payment was printed over a preprinted section of the retail installment sales contract form that Citizens supplied to the dealership.

The suit sought damages on behalf of LeFoll and 103 other customers whose contracts showed the same problem in a one-year period.

The judge said no trial is needed to determine the defendants' liability.

"The payment due date is not clear or conspicuous on any of the 104 contracts," he said in his decision. "The printed due dates range from indistinct to indiscernible, but an average, reasonable person could not find any of the disclosures to be clear and conspicuous."

As for lender Citizens, found liable for accepting the contracts, "the violations on the contracts are apparent on the face of the disclosure statements," the judge said.

Defense lawyer Kevin Greene of Hartford said the problem was not caused by the lender's preprinted forms "but was more the function of an occasional anomaly with the computer system used by the dealership." He said there will be no appeal.

The judge has not set a hearing date to determine the amount of damages and attorney fees.

The plaintiff has requested $1,000 in statutory damages for each class member for a total of $104,000. Her lawyer, David Blinn of Rocky Hill, Conn., said the maximum potential damage award in such a class-action suit under the Truth in Lending Act is $500,000.

Blinn said LeFoll suffered "some amount of trepidation" from not knowing when she needed to make her first loan payment. He added: "It's difficult to prove the value of any of these disclosures."

Key and Citizens are looking for the judge to award no damages or only a token $25 per plaintiff, arguing there is no evidence that any class member was confused or suffered any economic harm. Said Greene, their lawyer: "This case is a further example of how dealerships are unfairly penalized under the Truth in Lending Act."

Still unresolved is LeFoll's individual claim that Key violated the state's unfair trade practices law in its handling of the Sonata's $1,500 manufacturer's rebate. She alleges that Key deposited the $1,500 manufacturer's rebate into a bank account instead of crediting the rebate against the purchase as promised.

Key disputes the allegation.

You can reach Eric Freedman at freedma5@msu.edu. 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.

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Monday, December 26, 2011

Sales could hit 14 million in '12

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Longer loans return to help boost sales

Donna Harris
Automotive News -- December 7, 2011 - 12:01 am ET

Faunda: People want lower payments.

The long loans that were used to goose car sales a few years ago are back.

Finance managers say auto lenders are promoting loan terms of 72 months and even 84 months, as they did just before the credit markets crashed in late 2008.

"Customers have no aversion to signing longer-term notes these days," says Marv Eleazer, finance director for Langdale Ford in Valdosta, Ga. "I'm seeing 72-month loans at 120 percent [loan-to-value] and greater. I've even papered a few at 84 months."

In 2011, loans of 73 months and longer account for 9 percent of new-vehicle loans. That's up from 6 percent in 2009 and 2010 and close to the peak of 10 percent in 2008, reports consulting firm J.D. Power and Associates.

Loans of 61 to 72 months make up 40 percent of the loans written, J.D. Power data show.

The longer term lowers monthly payments, which appeals to many shoppers.

While unemployment remains high, consumers "just want their monthly payments cheaper," says Greg Faunda, business manager of Greenwood Chevrolet in Austintown, Ohio.

At a recent finance and insurance conference in Las Vegas, keynote speaker Kevin Borgmann, president of Capital One Auto Finance, said he feared looser credit terms and extended loan terms could short-circuit the auto sales recovery.

His concern: The longer maturities will keep people out of the car market for six or more years, stalling sales.

But in recent years, that hasn't been the case. Several factors take the edge off long loan terms:

-- Car buyers are making bigger down payments after the credit crisis, finance managers say. Used-vehicle values also are strong. Both help people build equity in their vehicles quickly.

-- Consumers often trade in vehicles before the loan expires, says Paul Taylor, chief economist for the National Automobile Dealers Association. So they'll be back for another car sooner than you think, he says.

-- Healthy lease volume will bring people back for another car sooner, says Tom Kontos, chief economist for the ADESA auto auction group. Currently, more than one in five new vehicles is leased, and leases are typically three years, he notes.

Since 2007, Toyota Financial Services has offered its most creditworthy customers 84-month loans. The seven-year loans represent just 2 to 4 percent of its loan portfolio and most are paid off early.

Brock Bayles, Toyota Financial's national manager of pricing analysis, says the extended term is one of several strategies the lender uses to stimulate sales. The long loans "support the automotive recovery," he says.

Recent history suggests long loans could become the new normal. Auto loan maturities have been increasing as new-vehicle prices rise.

From 1971 to 1983, three-year car loans were the norm, reports the Federal Reserve in its data from finance companies.

In June 1984, the average maturity exceeded 48 months for the first time. In 2003, the average maturity exceeded 60 months for the first time.

Since then, the average term has zigzagged upward peaking at 67 months in July 2008 and never dipping below 59 months. In January, the latest figure available, the average maturity was just over 62 months.

"Customers gravitate toward lower payments, and extended terms provide more affordable options," says Gary Allgeier, finance director for the Suburban Collection dealership group near Detroit.

"Since many lenders have relaxed terms to 2008 levels, it should be no surprise that customers are choosing them."

Steadily rising retail selling prices have led to correspondingly larger loans with longer repayment terms.Average loan maturity (months)Source: Federal Reserve, National Automobile Dealers Association

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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.

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Monday, December 12, 2011