| | | WEEKLY REPORT | July 11, 2012 |
| | | | | | | Falling residuals threaten leasing
 After two years of nearly across-the-board increases, ALG has trimmed predicted residual values for most of the top-selling U.S. auto brands this year. Lower residuals are a concern for dealerships because they represent a headwind to growth in leasing. Lower residuals mean higher monthly payments. In leasing, the customer in effect borrows the difference between the upfront cost of the vehicle ...  story
| Q&A
Connecting the dots between 'disciplined' incentives … high residuals … and more leasing
 ALG forecasts the residual values that are widely used for calculating vehicle lease terms, and for many brands, the trend is lower residual values. To make those forecasts, Eric Lyman, director of residual solutions for ALG, and a team of analysts closely monitor trends in the auto market that affect the F&I world, including shifts in customer demand, incentives, future product plans and price ... story
| 4 F&I tips that work anywhere -- even Hawaii
Kelly O'Neill, finance manager for Infiniti of Honolulu, has some F&I strategies that apply just about anywhere, including one with a specific Hawaiian twist. ... story
| Toyota's financing arsenal mixes leases, low APRs
 Now that Toyota has put last year's earthquake-induced vehicle shortages behind it and dealers' lots are full again, the company is pulling out an arsenal of loan and lease offers to help retailers move the metal. ... story
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 •Don't give up on cash or credit union customers.
•Integrate F&I with the rest of your dealership.
• Limit F&I menu items to about 5.
• Don't let up on identity "red flags."
Those are a few of the numerous tips provided by experts during Automotive News F&I Week last month. Replay all of the webinars -- at no charge -- and get F&I smart by logging onto fandiweek.com |
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F&I BY THE NUMBERS
ALG trims residual values
After broad increases in 2011, ALG trimmed many predicted residual values this year. That's a headwind for new leases, since a lower residual means a higher monthly payment. Data cover the 7 top-selling mainstream brands and the 3 biggest-selling luxury brands. Data reflect 36-month residuals, as a percent of sticker price. Average for ALG Guides from January-August. | | Mainstream brand | YTD 2012 | YTD 2011 | YTD 2010 | | Ford | 43.5% | 44.7% | 41.8% | | Chevrolet | 42.3% | 43.8% | 40.5% | | Toyota | 49% | 50.3% | 48.4% | | Honda | 50.2% | 52.4% | 51.7% | | Nissan | 44.9% | 48.1% | 46.5% | | Hyundai | 49.3% | 49.2% | 47% | | Kia | 47.9% | 46.9% | 43% | | | | | | Luxury brand | Mercedes-Benz | 45.4% | 46.1% | 42.8% | | BMW | 44.8% | 47.1% | 44.7% | | Lexus | 46.6% | 49.6% | 49.3% | | | | | | | Source: ALG |
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JIM HENRY
Fair warning for ID thieves
| |  | Jim Henry is a special correspondent for Automotive News | |
Customers usually don't mind proving their identity, but it helps if the F&I manager can point to a sign posted prominently in the dealership explaining that it's for their own protection, said Dave Robertson, executive director of the Association of Finance & Insurance Professionals.
AFIP, by the way, just happens to sell such a sign. It says: "CUSTOMER NOTICE: To help protect you from identity theft, this dealership employs detection and prevention procedures addressed by the RED FLAGS RULE as established by the Federal Trade Commission, 16 CFR Part 681." (That last part cites the Code of Federal Regulations.)
Besides reassuring legitimate customers, Robertson said, the sign alone probably deters some identity thieves. "I sell a lot of those signs. I mean -- a lot," he said in a recent phone interview.
He added: "I bet they sell a lot more 'This home protected by such-and-such security system' signs than they do home-security systems."
Obviously, there's a lot more to meeting the Red Flags Rule, and AFIP has the lowdown on all that. A sign helps, but it's more important that F&I managers get their entire staff to sign off on following the law.
How mobile technology helps F&I managers
Instead of putting F&I managers out of work, mobile technology is more likely to help them do a better job, speakers at last month's Automotive News F&I Week Webinars said. That's not to say there won't be significant changes. ... story
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F&I PRESS RELEASES
» Enhanced CoVideo Email Tool With Carfax Integration Helps Boost Customer Conversion Rates
» Banks Will Expand Lending to Car Buyers with Damaged Credit, FICO Survey Finds
DEALER JOB LISTINGS
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F&I BY THE NUMBERS
Dealers have more lender choice
The average number of "active" lenders per dealer is on the rebound after the downturn -- that is, lenders that receive dealers' credit applications and book loans. That's a positive development for dealerships, since more lenders are competing for their business. Rounded to the nearest whole number. | | | As of Q1 | Lenders per dealer | | 2012 | 10 | | 2011 | 9 | | 2010 | 8 | | 2009 | 8 | | 2008 | 11 | | 2007 | 12 | | | |
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