| | | WEEKLY REPORT | October 24, 2012 |
| | | | | | | Q&A
How gas savings can fuel F&I sales
 The best way to sell F&I products is to act like a consultant, not a salesman, says Ray Borg, business manager at Suburban Toyota of Troy, outside Detroit. And like many other F&I managers, Borg uses props and prompts to make F&I products look more valuable and affordable to customers. But he employs other tactics as well. ...  story
| Delinquencies, defaults up slightly
 Delinquencies on auto loans and charge-offs for bad loans are still quite low. But a trio of the biggest banks in auto lending showed a slight uptick in either delinquencies, charge-offs or both when they released quarterly earnings this month. ... story
| Lease customers most faithful to brand
 When it comes to auto brand loyalty, lease appears to be more. According to a study released this month by Experian Automotive, for select mainstream brands, loyalty for returning lease customers in the second quarter was nearly double what it was for customers who had purchased their previous vehicle. ... story
| Ally's Canadian auto finance unit sold to RBC for $4.1 billion
 Royal Bank of Canada has agreed to buy the Canadian auto finance and deposit arm of Ally Financial in a $4.1 billion deal to expand its vehicle-lending business at a time when loan growth overall is slowing in the country. ... story
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F&I BY THE NUMBERS
Delinquencies, defaults up slightly at 3 big banks
Delinquencies on auto loans and charge-offs for bad loans are still quite low. But a trio of the biggest banks in auto lending showed a slight uptick in either delinquencies, charge-offs or both when they released quarterly earnings this month. Dollars in billions. | | | | | | | | Capital One | Q3 2012 | Q3 2011 | Change | | Total outstanding loans | $25.9 | $19.8 | 31% | | Originations | $3.9 | $3.4 | 15% | | % 30+ days delinquent | 6.1% | 6.3% | -3% | | Charge-offs | 1.8% | 1.7% | 6% | | | | | | | Chase Auto | | | | | Total outstanding loans | $48.9 | $46.7 | 5% | | Originations | $6.3 | $5.9 | 7% | | % 30+ days delinquent | 1.1% | 1.0% | 10% | | Charge-offs | 0.7% | 0.4% | 106% | | | | | | | Wells Fargo | | | | | Total outstanding loans | $43.6 | $39.1 | 11% | | Originations | $6.3 | $5.3 | 20% | | % 30+ days delinquent | 1.4% | 1.3% | 5% | | Charge-offs | 0.5% | 0.7% | -27% | | | | | | | | | | |
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JIM HENRY
More credit checks mean more loans
| |  | Jim Henry is a special correspondent for Automotive News | |
Here’s a chicken-or-egg question: Do people check their credit because they want a loan, or do they want a loan because they check their credit?
A TransUnion study released last week said someone who “actively” monitors a credit file is more likely to take out a loan than someone who only checks credit status once in a while. And both of those categories are more likely to take out a loan than people who never check their credit. That’s for any loan, including an auto loan.
It sounds obvious: Someone who checks his or her credit is more interested in a loan than someone who doesn’t.
But there are reasons to monitor your credit even if you’re not in the market for a loan, said Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit. For instance, you could be worried about identity theft, he said.
Becker said credit monitoring seems to be like health monitoring. The average person may not check at all. Healthier-than-average people keep track so they can stay that way. Less-healthy people keep track so they can improve, he said.
So I asked him: Should dealers encourage consumers to monitor their credit? Would that inspire them to buy a car and take out a loan?
Said Becker: “I don’t have any data on that.”
F&I PRESS RELEASES
DEALER JOB LISTINGS
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F&I BY THE NUMBERS
Ford leads in brand loyalty
Loyalty runs deeper among lease customers than it does among buyers for six select mainstream brands. The data show the percentage of a brand's lease and purchase customers who, when they returned to the market in the second quarter, chose the same brand. | | | | | | | | Brand | Lease | Purchase | | Ford | 67% | 45% | | Nissan | 57% | 31% | | Honda | 55% | 38% | | Toyota | 50% | 43% | | VW | 41% | 24% | | Hyundai | 41% | 36% | | | | | | | | Source: Experian Automotive | | | |
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