| | | WEEKLY REPORT | January 4, 2012 |
| | | | | | | Toyota Financial looks to boost leasing with wear-and-tear product
Toyota Financial Services expects to launch wear-and-tear lease protection policies early in 2012 as part of an overall strategy to increase lease penetration, according to retailer interviews.
A TFS spokesman confirmed that the new F&I product was in development, but he did not provide details of the policies or the timing.
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| Q&A
Big service contract results without the 'fluff'
 Dealership General Manager Jim Giddings says his store doesn't get fancy with F&I products.
The dealership, Lustine Toyota in Woodbridge, Va., near Washington, D.C., doesn't rely on products such as tire and wheel or fabric protection -- "We don't do fluff" -- and shuns reinsurance programs, which, while lucrative, can be "hit or miss," ... story
| Dealers weigh giving customers great loans upfront or tapping refi market
 If auto loan refinancing isn't on your dealership's radar, it may be time to put it there.
The gathering elements of historically low interest rates, auto owners searching out lower monthly payments and lenders scrambling for business could converge to bury unprepared dealerships under a pile of reserve chargebacks.
Although dealerships aren't seeing a lot of vehicle ... story
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F&I BY THE NUMBERS
GM Financial signs up more dealers
GM Financial has almost three times as many dealers signed up as it did in June 2009. Back then, the former AmeriCredit and other auto lenders had problems borrowing money to make new loans. General Motors acquired AmeriCredit in October 2010 and renamed it GM Financial. | | | Dealers as of: | 2011 | 2010 | 2009 | | 12/31 | TBA | 9,988 | 6,676 | | 9/30 | 11,969 | 9,293 | 4,858 | | 6/30 | 10,101 | 8,942 | 4,130 | | 3/31 | 9,811 | 8,125 | 4,605 |
| | Source: GM Financial |
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JAMIE LAREAU
Well-traveled used cars merit lower-priced products
| |  | Jamie LaReau covers auto dealers for Automotive News | |
In today's economic slump many practical folks see value in high-mileage used vehicles. Vehicles with 80,000 miles or more account for about a fifth of franchised dealers' monthly used-vehicle sales. Some dealers expect that pace to continue in 2012.
That's why finance and insurance providers need to keep up with the changing mix of dealers' used inventory by offering lower priced aftermarket products for those who buy well-traveled used vehicles.
If insurance providers "have taken a wait-and-see attitude thinking that the mix will return to the old normal, then it's time to be proactive and sit down with their data and redesign some of their offerings to fit the new normal," says Tom Wilson, managing director of Front Range Dealer Services in Castle Rock, Colo.
"Most buyers of inexpensive high-mileage vehicles expect that they're not going to get a prime piece devoid of any issues," Wilson says. "If there are reasonably priced protection options available, then F&I will have a running shot at sharing in the profits."
But what's reasonable?
F&I managers say the retail prices of tire-and-wheel plans range from $400 to $800, windshield treatments cost $300 to $400, and paint and fabric protection is $300 to $800.
Some finance managers say such prices are reasonable to protect a high-mileage used car when a person is spending several thousand for it.
JIM HENRY
5 F&I trends for 2012
| |  | Jim Henry is a special correspondent for Automotive News | |
Here are five F&I trends to watch out for in 2012, according to dealers and officials at financial institutions that do retail business with dealerships.
The first four are closely related; the last one is a wild card:
1. More players, more competition. The upside is that lenders will be courting dealers.
2. Thinner interest-rate margins. More competition among lenders inevitably forces them to cut rates and try to make it up on volume.
3. Greater volume. Increasing credit availability, the possibility of lower prices and recovering household finances should produce higher unit volume.
4. Greater emphasis on aftermarket products. Potentially thinner per-unit margins on financing mean more emphasis than ever on F&I product sales at dealerships.
5. New regulation. Assuming the Consumer Financial Protection Bureau gets its act in gear, it could generate new requirements for financial institutions that ultimately affect dealerships -- even though most franchised dealerships are exempt from direct bureau supervision.
F&I PRESS RELEASES
» eSignature Capability Added to iPad/Android tablets
DEALER JOB LISTINGS
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F&I BY THE NUMBERS
Honda, Toyota, Nissan: Leasing leaders
The top 3 Japanese brands still led U.S. leasing in Q3, even as Honda's and Toyota's shares plunged. Ford brand, meanwhile, broke into the top 5. Ford's lease penetration -- expressed as a percentage of retail deliveries -- was well below average. | | | | Share of total U.S. leases | Lease penetration | | Q3, 2011 | | | | 1. Honda | 11.6% | 28.8% | | 2. Toyota | 10.5% | 21.0% | | 3. Nissan | 10.4% | 27.8% | | 4. Ford | 8.7% | 14.4% | | 5. BMW | 6.0% | 63.4% | | TOTAL INDUSTRY | 100% | 22.7% | | | | | | Q3, 2010 | | | | 1. Toyota | 19.0% | 29.1% | | 2. Honda | 16.6% | 31.8% | | 3. Nissan | 9.1% | 25.7% | | 4. BMW | 5.2% | 56.3% | | 5. Lexus | 4.7% | 59.0% | | TOTAL INDUSTRY | 100% | 22.7% |
| | Source: Experian Automotive |
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