WEEKLY F&I REPORT: How a Chrysler-Jeep store's service writers feed the F&I office | Lenders decry Georgia's tax hike on leases | S.C. Nissan store prevails in financing suit

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WEEKLY REPORT January 9, 2013 Tell a colleague about this newsletter         Contact Us            Q&A How a Chrysler-Jeep store's service writers learned to feed the F&I office Some experts say that attempts to sell extended-service contracts in the service lane will likely fail if service writers steer customers back to the F&I office. But Mike Casisa, finance director at Southern Chrysler Jeep-Greenbrier in Chesapeake, Va., says his store is an exception. ...  story  Auto lenders decry Georgia's tax hike on leases Starting March 1, the state of Georgia is expected to implement a new tax that auto lenders complain would put a higher tax burden on cars acquired through a lease than on vehicles purchased using a loan or cash. ...  story  LEGAL FILE Nissan store prevails in suit over financing The South Carolina Court of Appeals has tossed out a $19,963 judgment against a Nissan store, finding no bad-faith violations of the state dealer law in the financing and repossession of a used car. Dick Smith Nissan in Columbia, S.C., didn’t ... >> Story            F&I BY THE NUMBERS Outstanding loans drop, losses fall at Ford Credit Ford Credit's outstanding U.S. loans have dropped, reflecting the industry sales decline a few years ago. Net losses are also down for the captive finance company, partly because of favorable auction values on repossessions. 9 mos. 2012 9 mos. 2011 Change Avg. loans outstanding 2,024,493 2,206,479 -8% Net losses after charge-offs, repossessions* $60 $99 -39% % of avg. outstanding contracts charged off 2.1% 2.8% -23% Avg. net loss per contract charged off $1,854 $2,164 -14% * In millions Source: Ford Motor Credit   JIM HENRY Auto-credit worries appear over   Jim Henry is a special correspondent for Automotive News Hopefully this isn’t wishful thinking, but strong 2012 U.S. auto sales seem to indicate once and for all that consumer credit won’t be a drag on another year of improving sales in 2013. This may be oversimplifying the timing, but roughly speaking credit was harder to get in 2009 and 2010, even for some prime-risk borrowers. In 2011, prime-risk credit came back and subprime began to improve. In 2012 subprime came back, and today there are few worries about credit availability, except maybe for the riskiest subprime customers. “I do think it’s a little bit in the rearview mirror. People who need an auto loan at this point, they’re all able to get one,” said Ellen Hughes-Cromwick, Ford Motor Co. chief economist, in a conference call for analysts and media last week. ) “I really don’t see automotive credit contracting at this juncture,” she said. Can somebody please knock on wood?   JAMIE LaREAU F&I will get tougher in post-cliff economy   Jamie LaReau covers auto dealers for Automotive News The hardest job in a dealership this year will be selling finance and insurance. Now any F&I manager reading this would laugh and say that’s always the case. But fasten your seatbelt because it’s going to be especially challenging this year. That’s because most customers won’t have that extra $100 a month in their paycheck to cover an extended-service contract or paint protection policy like they had last year. Congress struck a deal to keep the country from going over the fiscal cliff. And while the legislation will keep broader middle class income taxes from rising, most workers will still have to pay at least 2 percent more in payroll taxes. According to a CNN report that means most of the country’s 160 million workers will see their monthly paychecks shrink by $50 for those earning $30,000 annually. The tax hike will shave off $189.50 a month for those with incomes totaling $113,700. The ding in income is probably not deep enough to stall car sales. But it certainly could give many consumers pause when considering those pricey add-ons in the F&I office. And consider consumer jitters. The consumer confidence index measures the public’s sentiments each month. It sank six points in December, a huge turnaround from October, when the index reached a four-year high. Between Oct. 30 to Dec. 24, holiday shoppers spent less than 1 percent more than they did last year, according to a MasterCard Advisors SpendingPulse report released last week. That’s compared to the 2 percent sales gain in the same period in 2011. That being said, it will be an interesting year to watch how F&I managers overcome these economic obstacles to meet their sales goals.   F&I PRESS RELEASES » Goldman Sachs Affiliate Acquires Safe-Guard » TriStar Announces New Vehicle Service Contract: TriStar Freedom Guard » FICO Relocates Headquarters to Silicon Valley DEALER JOB LISTINGS Customer Service Representative - primal - AL: primal F&I Director & Sales Manager - Confidential - USA: Confidential Controller - Tysinger Motor Co Inc - Hampton Roads/Norfolk, VA: Tysinger Motor Co Inc Finance & Insurance Director - Unknown - NA: Unknown     F&I BY THE NUMBERS New-vehicle affordability improves Cars and trucks were more affordable through the latest four quarters, as measured by the Comerica Affordability Index. The index measures how many weeks of median U.S. family income it takes to buy an average new vehicle. Improved affordability -- that is, a lower number -- helps dealerships move more volume. 2012 Weeks of income needed for new-vehicle purchase Year-ago change Q3 23.1 -4.5% Q2 23.3 -4.1% Q1 23.5 -1.7% 2011 Q4 23.5 -0.8% Q3 24.2 2.1% Q2 24.3 1.7% Q1 23.9 -1.2% 2010 Q4 23.7 -0.4% Q3 23.7 7.7% Q2 23.9 6.7% Q1 24.2 8.0% 2009 Q4 23.8 0.4% Q3 22 -5.6% Q2 22.4 -1.8% Q1 22.4 -3.4% Source: Comerica Inc. Note: Comerica has revised some historical data >> Unsubscribe from this newsletter                        Copyright © Automotive News                        Designed by Templatesbox.com Automotive News is located at 1155 Gratiot Ave., Detroit, Michigan, 48207