| | | WEEKLY REPORT | March 7, 2012 |
| | | | | | | Leasing boom? Not so fast
 Dealers looking for a big increase in leasing this year may be disappointed. Some forecasters see a leasing boom this year and beyond. And one even suggested leases will account for 40 percent of new-vehicle deals by the end of the decade, up from 30 percent in 2007. ...  story
| Why bankrupt consumers make good prospects
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. ... story
| Q&A
Job 1 for GSFSGroup: Be known nationally
 GSFSGroup, the former Gulf States Financial Services, is about to shift into high gear in its drive to expand nationwide. The company, which administers and sells F&I products and does training, is looking to sign up more agents to pitch its products and services to dealers across the country, says Keith Cooper, the company's new national sales director. ... story
| GM partners with Wells Fargo to finance sales, dealers in western U.S.
 GM is teaming up with Wells Fargo to provide financing to Chevrolet, Buick, GMC and Cadillac dealers and retail customers in the western United States. The region includes California, the nation's largest new vehicle market and a key priority in GM's efforts to rebuild sales and market share. GM said the long-term arrangement with Wells Fargo will complement offerings through GM Financial, its ... story
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F&I BY THE NUMBERS
Leasing share of retail slips in Q4
The rate of increase in leasing's share of retail volume slowed through late 2010 and 2011. In the fourth quarter of 2011, lease penetration declined a bit from the year-ago quarter, the first time that happened since 2009. | | | | | | | | Lease share | Year-ago change
(percentage points) | | 2011 | | | | Q4 | 19.5% | -0.7 | | Q3 | 19.0% | 0.5 | | Q2 | 19.8% | 1.4 | | Q1 | 22.1% | 3.0 | | | | | | 2010 | | | | Q4 | 20.2% | 4.4 | | Q3 | 18.5% | 8.2 | | Q2 | 18.4% | 5.7 | | Q1 | 19.1% | 4.7 | | | | | | 2009 | | | | Q4 | 15.8% | 1.2 | | Q3 | 10.3% | -4.5 | | Q2 | 12.7% | -6.4 | | Q1 | 14.4% | -7.8 | | | | |
| | Source: Power Information Network |
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JIM HENRY
Trick question, 'responsible' answer
| |  | Jim Henry is a special correspondent for Automotive News | |
Here’s a trick question: What does it mean if auto loan delinquencies are low and remain flat? Has auto lending reached equilibrium?
Probably not, said Peter Turek, automotive vice president in TransUnion’s financial services business unit.
Turek explained that delinquencies are expressed as a percentage of total loans outstanding. That means changing economic cycles exaggerate changes in delinquencies, he said.
In a downturn, more people are late with their payments, and fewer people take out loans. More late payments divided by fewer loans exaggerates the rise in delinquencies. In an upturn the opposite is true. Fewer late payments divided by more loans exaggerates the drop in delinquencies. That’s where the industry has been for the past two years.
In the fourth quarter of 2011, Turek said, delinquencies fell to only 0.46 percent, down from 0.59 percent a year earlier. That was the ninth straight quarter in which delinquencies dropped from the year-earlier comparison, he said.
For the rest of 2012, Turek expects delinquencies to level off.
Normally, the growth in new originations would put downward pressure on delinquencies, but statistically, delinquencies appear to have stopped falling, Turek said. In turn, that could imply the performance of new auto loans is in fact starting to deteriorate, he said.
At least delinquencies haven’t had a statistical uptick, despite a well-documented increase in subprime lending, Turek said. That suggests that so far, lenders have eased, but they’ve done it in a “responsible” way.
F&I PRESS RELEASES
» Ally To Launch Vehicle Marketing Program to Support Dealers
» BMW Group Financial Services Builds Brand Loyalty for Lease-end Customers -- Launch of All-New Video Platform Enhances Consumer Peace-of-Mind.
» First Associates Loan Servicing Selected to Service American Pegasus SPC
DEALER JOB LISTINGS
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F&I BY THE NUMBERS
Auto-loan rates fall across the board
Average auto-loan interest rates were down in the fourth quarter for new and used vehicles, regardless of a buyer's credit score or risk profile, a sign that competition among lenders is heating up. Credit scores are on the Experian "Scorex Plus" scale. | | | | | | | New-vehicle loans | Q4 2011
Avg. | Q4 2010
Avg. | | PRIME | | | | Super Prime (740+) | 3.3% | 3.8% | | Prime (680-739) | 4.5% | 5.0% | | | | | | SUBPRIME | | | | Nonprime (620-679) | 6.3% | 6.8% | | Subprime (550-619) | 9.6% | 10.3% | | Deep subprime (below 550) | 12.5% | 13.4% | | | | | | Used-vehicle loans | Q4 2011
Avg. | Q4 2010
Avg. | | PRIME | | | | Super Prime (740+) | 4.5% | 5.1% | | Prime (680-739) | 6.4% | 7.1% | | | | | | SUBPRIME | | | | Nonprime (620-679) | 9.3% | 9.9% | | Subprime (550-619) | 14.2% | 14.6% | | Deep subprime (below 550) | 17.8% | 17.9% | | | | |
| | Source: Experian Automotive |
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