| | | WEEKLY REPORT | August 29, 2012 |
| | | | | | | New NADA guide listings could help dealers finance CPO cars
 NADA Used Car Guide will add manufacturer-certified used-vehicle retail values to its guide book, effective Sept. 1. Jonathan Banks, an analyst with NADA guide, says the values reflect the typical premium added to the retail value of a used vehicle that is sold under a factory-certified used-vehicle program at a franchise new-car dealership. ...  story
| Ohio dealer group gets OK on GAP financing
Ohio dealers may soon find it easier to pitch GAP policies to customers. A change in Ohio state law effective next month will make it clear that it’s OK to finance a GAP policy on the same retail installment contract as the car. ... story
| Q&A
So many lenders 'it's almost distracting'
 Findlay Automotive Group CFO Tyler Corder agrees auto finance is back. He says so many lenders have lined up wanting to sign up with the group that it's “almost distracting.” Findlay Automotive of Henderson, Nev., has 27 dealerships, mostly in and around Las Vegas, an area that was economically hard-hit during the recession but is now much improved, Corder says. ... story
| Subprime lender Exeter expects growth
 Exeter Finance Corp. already is preparing to outgrow a servicing center it opened just last week in Irving, Texas. Several subprime auto lenders are expanding, including GM Financial Inc., Santander Consumer USA, a subsidiary of Spain's Banco Santander, and a number of smaller independents like Exeter. ... story
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F&I BY THE NUMBERS
| | Two-year leases make a comeback
Two-year leases are making a comeback this year. They have been slow to recover after nearly disappearing in 2009, when lenders didn't want to take a chance on residual values. | | | | % of all leases that
are 24 mos. or fewer | | 2012 | | | Q2 | 11.1% | | Q1 | 9.9% | | | | | 2011 | | | Q4 | 3.2% | | Q3 | 6.0% | | Q2 | 5.0% | | Q1 | 5.3% | | | | | 2010 | | | Q4 | 2.7% | | Q3 | 4.5% | | Q2 | 3.7% | | Q1 | 3.7% | | | | | 2009 | | | Q4 | 0.8% | | Q3 | 0.8% | | Q2 | 1.1% | | Q1 | 1.7% | | | | | | Source: Power Information Network |
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JAMIE LaREAU
Home deliveries? Make sure to tweak F&I pitch
| |  | Jamie LaReau covers auto dealers for Automotive News | |
Edmunds.com is exposing a secret in the auto business: Most dealerships will deliver a vehicle to a customer's home or office.
Edmunds.com urges consumers to request deliveries once they've negotiated a car purchase. The customer is spared hours of waiting at a dealership for paperwork -- and the customer escapes the dealer's hard sell of additional products and services in the finance and insurance office, Edmunds.com says.
The first benefit is a win-win for customers and dealers. A customer pleased with a delivery means higher customer satisfaction scores. It could lead to more sales from word-of-mouth goodwill.
The second perceived consumer benefit, however, may not be.
Sure, the sale of products such as extended-service contracts, wheel-and-tire protection and paint-and-fabric protection are profit generators. But many customers find value in them. Those products also often prompt customers to return for service. With ever-shrinking profit margins on vehicle sales, sales on the back end are critical.
If a dealer can't get a customer into the F&I office to pitch those products, revenue could nosedive.
Edmunds.com is sympathetic to dealers, says Philip Reed, senior consumer advice editor at Edmunds.com in Santa Monica, Calif. But Edmunds.com is a consumer advocate, he says. Reed's role is to protect consumers who are often in a state of euphoria when buying a new car and might buy F&I products "they just don't need," Reed says.
Consumers are increasingly buying vehicles off dealership Web sites and negotiating a deal over the phone, Reed says. So the request for home or office deliveries likely will rise.
That means dealers will need ways to pitch F&I in someone's living room instead of the dealership.
JIM HENRY
How many would-be ID thieves bolt? We may never know
| |  | Jim Henry is a special correspondent for Automotive News | |
It’s odd that there aren’t a lot of statistics around documenting whether the Red Flags Rule is working.
The Federal Trade Commission started enforcing the rule, which is aimed at preventing identify theft and protecting confidential customer data at dealerships, last year. For dealerships, it’s a paperwork burden at the very least.
Anecdotally, customers don’t seem to mind submitting to an extra measure of scrutiny. But the rule creates a risk that dealerships could offend some legitimate customers by acting as if they were suspicious.
An FTC spokesman told me a while back there are no publicly available statistics on enforcement or dealer compliance. But if I were the FTC, I would want to document how many dealership programs are in place and how many identity thieves are caught, and give an estimate of how many are deterred.
That last category -- identity thieves who simply walk away before attempting a bogus deal -- could be a big one. Presumably, many would-be thieves -- the smart ones -- simply walk away at the first whiff of suspicion. Granted, that will be tough to prove.
But do the results justify the time, trouble and expense dealers are taking to meet the requirements? It’s odd that the government doesn’t seem to be saying.
F&I PRESS RELEASES
» Swaplease.com customer credit turns more positive
» Equifax Reports Significant Improvement in Delinquency Rates Across Multiple Consumer Lending Sectors
DEALER JOB LISTINGS
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