WEEKLY F&I REPORT: Ally Financial adds balloon notes; program will fill void for dealers | Hyundai division to get branded F&I products | How downturn's lessons spell opportunity today

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WEEKLY REPORT September 12, 2012 Tell a colleague about this newsletter         Contact Us            Ally Financial adds balloon notes; program will fill void, dealers say Ally Financial is offering balloon-note loans through dealerships in New York and California with plans to roll them out nationwide by year end. In those states, the balloon-note program is available to customers purchasing new and used cars through Chrysler Group, Fiat, General Motors, Mitsubishi and Suzuki dealerships. There's no minimum down payment requirement, the company said. ...  story  Hyundai division to get branded F&I products Hyundai Capital America plans to introduce a new menu of branded F&I products for the Hyundai make in January. It's part of an industry trend to brand F&I products such as extended-service contracts and GAP, as well as secondary products including prepaid maintenance and tire-and-wheel coverage. ...  story  How downturn's lessons spell opportunity today There are some difficult auto finance lessons learned during the last recession that dealers and auto lenders can turn to their advantage as auto sales continue to rebound, a lending exec told F&I conference attendees at the Industry Summit here this week. ...  story  Lenders to dealers: We'll take the deal After the collapse of credit in the recession, lenders have returned strongly to financing auto sales. Car dealers are finding lenders eager to finance their deals, including subprime loans. In fact, so many auto lenders are trying to sign up to buy indirect loans from Findlay Automotive Group in Henderson, Nev., that it's almost a nuisance. ...  story            F&I BY THE NUMBERS Subprime's share rises Subprime's share of U.S. loan originations for the second quarter topped second-quarter 2008 levels for the first time in four years. The second quarter of 2008 was the last full quarter before the global financial crisis in September of that year, when credit markets froze. Subprime Prime Q2 2012 44% 56% Q2 2011 41% 59% Q2 2010 37% 63% Q2 2009 38% 62% Q2 2008 42% 58% Source: Experian Automotive   JIM HENRY GM Financial poised to strengthen subprime lending   Jim Henry is a special correspondent for Automotive News So, how good is business for GM Financial? It set a record-low cost of funds last week, paying just 1.5 percent interest on an asset-backed securities transaction. Dealerships will have to wait and see how much of that lower cost of funds GM Financial chooses to pass along at retail. But inevitably that will help GM Financial compete in the growing subprime market. It gets more complicated than this, but the net effect is that on Sept. 5, GM Financial announced it borrowed $1.3 billion at only 1.5 percent interest. That beat the company's previous record low of 1.9 percent on an asset-backed transaction in June. That's a big improvement. During the downturn, GM Financial's predecessor company, independent lender AmeriCredit, paid 7.5 percent in a July 2009 transaction. General Motors bought AmeriCredit in 2010, forming it into GM Financial. In an asset-backed transaction, an auto lender basically sells off a bundle of loans to investors to acquire funds to make new loans. The net effect is that the lender borrows money from the investors that buy the asset-backed securities. The investors get paid over time, as consumers repay the loans. Dealerships form special finance units for consumers with shaky credit Lenders are increasingly saying yes to credit-challenged customers. During the first quarter of 2012, vehicle loans to subprime borrowers increased by 11 percent, according to Experian Automotive. ...  story  AutoNation's pilot subprime unit rescues deals in South Florida AutoNation plans to expand a pilot program that is rescuing about 13 percent of the retailer's rejected subprime deals in South Florida. Since its launch in mid-2010, F&I Central has shored up AutoNation's subprime business by moving turned-down applications from credit-challenged customers to a centralized department. ...  story  F&I Manager/Director - Cleo Bay Honda - Killeen, TX: Cleo Bay Honda Accounting Clerk/Administrative/Customer Service/Data Entry - GM - AL: GM Corporate Trainer - World Car Auto Group - TX: World Car Auto Group Experienced F&I - Vaden Nissan - Savannah, GA: Vaden Nissan Chief Financial Officer - ATLANTIC AUTO GROUP - Long Island, NY: ATLANTIC AUTO GROUP Chief Financial Officer - ATLANTIC AUTO GROUP - Long Island, NY: ATLANTIC AUTO GROUP Controller - Confidential - St. Louis, MO: Confidential F & I Manager - Victory Automotive Group - San Francisco, CA: Victory Automotive Group     F&I BY THE NUMBERS Ford Credit loan volume rebounds Ford Credit's U.S. loan originations have been rebounding since 2010. Ford Credit has also reduced its reliance on subvention, or incentives. Figures are for loans only. U.S. loan originations % subvented Q1 2012 170,231 34% Q1 2011 148,022 49% Full year 2011 658,372 47% 2010 575,266 59% 2009 519,452 64% 2008 754,633 55% 2007 845,660 85% Source: Ford Credit >> Unsubscribe from this newsletter                        Copyright © Automotive News                        Designed by Templatesbox.com Automotive News is located at 1155 Gratiot Ave., Detroit, Michigan, 48207