| | | WEEKLY REPORT | September 5, 2012 |
| | | | | | | Auto lending on the rise, with caution
 Auto lenders aren't quite throwing "caution to the winds," even though they made bigger loans, at lower interest rates, and approved customers with lower average credit scores in the second quarter of 2012, according to Experian Automotive. ...  story
| Q&A
Subprime startup CEO bets on growth
 As much as subprime auto lending has grown in the past couple of years, Gary Lorenz is betting there's room for it to grow. Lorenz, 53, is the former president of Wells Fargo Auto Finance, which he left in 2008. He's now CEO of Global Lending Services, a newly launched subprime lender based in Atlanta. Earlier this year, the new company purchased an existing lender, Resurgent Auto Finance of ... story
| SAFCo adds states in 'controlled' expansion
Southern Auto Finance Co., a subprime auto lender based in Fort Lauderdale, Fla., expects to be in 16 states by year end, up from only six in April. ... story
| Toyota Financial's Borst on the value of captives
 Why do automakers need captive finance companies? We posed that question to George Borst, CEO of Toyota Financial Services. ... story
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LEGAL FILE
Dealership's doc fee was legal, court says
Ohio dealerships may legally charge document fees of up to $250 that can be added to a vehicle's base price and be subject to sales tax, the state Court of Appeals has ruled.
As a result, the unanimous three-judge panel refused to reinstate a ... >> Story
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F&I BY THE NUMBERS
TD Auto's dealer ties grow
TD Auto's indirect auto loans -- those arranged by dealers -- grew 22 percent in the fiscal third quarter, which ended July 31. Gains in earlier quarters are much greater, as they reflect TD Bank's acquisition of Chrysler Financial in April 2011. Dollars in billions | | | FY 2012 | FY 2011 | Year-ago
change | | Q3 | $12.4 | $10.2 | 22% | | Q2 | $11.5 | $5.9 | 95% | | Q1 | $10.9 | $3.4 | 221% | | | | | | | FY 2011 | FY 2010 | | | Q4 | $10.2 | $3.3 | 209% | | | | | | | | |
| | Source: TD Auto |
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JIM HENRY
F&I lobbyists seek easier state rules for wide range of products
| |  | Jim Henry is a special correspondent for Automotive News | |
F&I industry lobbyists have been pretty successful advocating a “model act” in state legislatures governing the sale of extended-service contracts. So the next move is to take a similar approach for other F&I products, such as GAP policies and tire-and-wheel plans.
That’s according to lawyers for the Service Contract Industry Council and the Guaranteed Asset Protection Alliance, which are both represented by the same law firm, Blank & Meenan of Tallahassee, Fla. Nikki Munro, a lawyer for Hudson Cook, a Washington, D.C.-area law firm that represents many dealers and auto lenders, recently voiced a similar opinion.
This isn’t just an academic exercise for state dealer associations. In Ohio, for instance, some lenders wouldn’t allow dealerships to include the cost of GAP in the vehicle finance contract because GAP fees occupied a legal gray area under state law.
A new Ohio state law that takes effect this month allows dealerships to include GAP fees in the finance contract. That’s a major selling point for retailers. The Ohio Automobile Dealers Association supported the change.
According to Blank & Meenan, 37 states have adopted some version of its model act. A key point is that states shouldn’t regulate extended-service contracts the same way as auto insurance. That is, dealerships shouldn’t need a license to sell insurance in order to sell extended-service contracts, and pricing shouldn’t be tightly regulated.
In a similar way, dealer advocates are turning their attention to clarifying the legal status of other F&I products.
Low-interest rates propel industry sales
 U.S. light-vehicle sales rose 20 percent in August to their highest pace since August 2009. One primary driver behind the surge: low interest rates and favorable financing terms. Since the downturn, Federal Reserve officials have kept interest rates low to spur economic growth. ... story
| Why dealerships are creating special finance departments
Dealership finance directors are discovering that to make the most of expanding opportunities in subprime, they need to focus on the task. In fact, nearly one-third of respondents to an Automotive News survey said they have a special finance department or are considering starting one to better serve credit-challenged customers and reap more sales. ... story
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F&I PRESS RELEASES
» Experian Automotive: Subprime auto loans in Q2 2012 exceeded prerecession levels
DEALER JOB LISTINGS
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F&I BY THE NUMBERS
Bad-loan losses drop at Santander
Losses from bad loans continued to fall for subprime auto lender Santander Consumer USA in the first half of 2012, but just barely. Meanwhile, delinquencies increased slightly. Figures are for accounts more than 30 days late. Dollars in billions. | | | First half
2012 | First half
2011 | | Loans outstanding | $15.0 | $14.3 | | Percent delinquent | 12.1% | 11.4% | | Percent losses | 3.5% | 3.8% | | | | | | | | | Full year
2011 | Full year
2010 | | Loans outstanding | $14.1 | $14.8 | | Percent delinquent | 13.5% | 13.6% | | Percent losses | 5.8% | 6.5% | | | | | | | Source: Santander |
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