Category Archives: Industry News

Auto Finance Industry News and Updates

New Cars with Lots of Value

Had some great feedback on our last post and we were requested to dig a little deeper on autos that provide real consumer value.  Well, we will give it another shot and extend our scope some.

2011 Lincoln MKZ| Luxury

Frankly, with all the models in the luxury sedans market, having to identify one that seems to have more value is a tough one.  Really did some research in this area and think that the 2011 Lincoln MKZ’s balanced approach wins over the best Germany or Japan offers.  We’re not talking all-out performance, but value. The MKZ is a perfectly competent luxury sedan that comes nicely equipped. It also offers a delicate balance of tout handling and a smooth, comfortable ride.  The 2011 Lincoln MKZ starts at just $34,645.

2012 Ford Mustang | Sports

Well, here we are with another Ford – as I’ve said before, I just love what they have done both in style and in quality.  But this fun to drive Mustang is sporty and very good looking.  Wow, I think I’m in love, lol.  Great looking and an excellent racecar like handling with powerful brakes.  I think it is the best Mustang since the Shelby.  It offer all that I’ve mentioned in a package that everyone can afford – all the while the truck space is so big that you won’t have issues with road trips or shopping.  It’s the ultimate value in the sports car class. The 2012 Ford Mustang starts at just $22,310.

2011 Honda Odyssey| Minivan

Here is a nice minivan with a lot of perks, nice seating arrangements that fold flat and a great compliment to when you need to haul things home from Lowes.  The new Odyssey sports a number of design tweeks that really make the auto appear much sportier and visionary than before.  Nice interior compliments the design but you won’t believe how comfortable this minivan is!  We think it has some excellent value.  The 2011 Honda Odyssey starts at just $28,075.

So what is the best way to get one of these auto financed?  To begin with you will need to compile a list of auto financing options.

Dealing direct is a good way to save money and dealing with a company that searches for the best offers in auto loans is also a good way to go.  Only through requesting and comparing quotes would you have a clearer picture on the various financing options. The time taken is now far less thanks to the net.  Companies like myAutoloan.com provide this matching and multiple offer process.  Again, myAutoloan.com is a proven choice.

Another idea and one of the better options to consider would be a large down payment that would then allow you to qualify for a shorter term and potentially a lower interest rate.  Of course there are also zero down payment options available for those people on a tight budget but they really are hard to qualify for.  You’re going to need good credit to do so.

In most cases the period of the auto loan would be anywhere from thirty six months up to seventy two.  If you were to choose the longest term then the overall cost is likely to be greater than if you could pay back the balance in a short time.  Choosing 48 to 60 months should provide you with the best rates.

Make sure you are clear if the interest rate is fixed or flexible – We recommend that you never take a flexible rate car loan.  Though a fixed rate is easier to understand it may end up costing more over time whereas a flexible interest rate would mimic the prevailing market conditions – so as long as the rates are low, grab a direct loan soon.  Since they are currently low, get it fixed because we all know they are sure to rise down the road.
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GM June U.S. Sales Improve 11 Percent

• GM gains market share in first half of 2011, with sales 192,056 units higher
• June retail sales rise 16 percent year over year, and up 4 percent over May
• Chevrolet Cruze sales surpass 20,000 third straight month; retail sales up 153 percent
• June total sales of full-size pickups increased 15 percent compared to May

General Motors dealers in the United States reported 215,358 total sales in June, an 11-percent gain compared to June 2010 according to a GM press release on Friday July 1. The gain was the result of continued solid retail demand for the company’s wide selection of fuel-efficient vehicles. Retail sales for GM’s brands rose 16 percent for the month, compared to a year ago, and were 4 percent higher than May.

For the month, Chevrolet Cruze had retail sales 153 percent higher than the Chevrolet Cobalt it replaced, and total sales above 20,000 for the third straight month. The 32 MPG highway-rated GMC Terrain and Chevrolet Equinox compact crossovers saw a combined retail sales increase of 78 percent during the month.  Passenger car and crossover retail sales also rose substantially, up 33 percent and 24 percent, respectively.

“With continued strong consumer demand for GM’s fuel-efficient vehicles, June was another solid month for us,” said Don Johnson, vice president, U.S. Sales Operations. “The month caps a successful first half of 2011 for us in the U.S. market – our sales are up and we’ve gained share profitably”, as reported in Forbes’ by Agustino Fontevecchia.

In the first half of 2011, GM dealers in the United States have reported 1,261,633 vehicles sold – a 192,056 unit increase over the first half of 2010 – leading to total and retail market share gains.

Passenger Cars
Total sales of GM passenger cars increased 28 percent during June, compared to a year ago. Retail sales for cars rose 33 percent for the month on the continuing strength of the Cruze, which was up 153 percent compared to the Chevrolet Cobalt it replaced. The Cruze Eco, which delivers an estimated 42 miles-per-gallon highway, accounted for 17 percent of the model’s sales during the month.

For the year to date, retail sales for GM’s full-size pickups are up 12 percent, while total sales of 259,101 units represent a 12-percent increase compared to the first six months of 2010.

Month-end dealer inventory in the United States stood at about 605,000 units, up about 21,000 units compared to May and about 168,000 units higher than June 2010.

It’s so nice to hear good news about the auto industry!  Let’s hope more good news is to follow.

New Car Values

There are simply a whole lot of choices when it comes to new auto.  Here are 3 of the top models for the 2011 year that clearly reflect value in their class.

2011 Ford Fiesta | Subcompact

I love Ford and what it continues to do with innovation.  It’s not like they are the new guy on the block but they have been around and have had their problems with a line up that was really looking “old”.  Now look at them!  They did not take the government handout – didn’t have to and they gained share because of it.  If you want a real bargain in terms of fuel economy, (28 mpg city, 37 mpg highway) this is the real deal – The Fiesta is a bargain and offers a whole lot for just a little.  That’s value!  What the best part?  The 2011 Ford Fiesta starts at just $13,200.

 

2011 Hyundai Elantra | Compact

There has been a lot of conversation about this auto and frankly, it’s deserving of the attention.  They have outdone themselves with great styling, good handling and excellent fuel economy. It’s listed at (29/40 mpg), which establishes a benchmark that others will struggle to achieve anytime soon.  Often overlooked by consumers, this Korean compact is really getting some attention – we think it’s mainly about its low price point compared with it’s Japanese competitors. The 2011 Hyundai Elantra starts at just $14,830.

2011 Kia Optima| Midsize

Many autos have held the prized “King of the Hill” platform and it was only a matter of time before a new challenger would emerge.  The 2011 Optima, according to consumer reports, is well ahead of the Honda Accord this year.  It’s been a deserving dethroning – so much value at a very competitive price.  The EPA ratings for the 2.4-liter 2011 Optima at 24 mpg in the city and 35 mpg on the highway with the six-speed manual, 24 mpg in the city and 34 mpg on the highway with the six-speed automatic.  It’s good looking, with great styling and curves but with a market leading warranty program and excellent mpg, it stacks up as a great to be considering.  The 2011 Kia Optima starts at just $18,995.

You can actually arrange auto financing online for the car you want to purchase.  Online, lenders can give quotes almost instantly.   The you can be at home, the pressure is off, and good, rational thinking can take place and you are in control.   Online lenders also offer more preferential rates than their real-world counterparts; this is because they have less overhead and they are not marking up the finance charge to add more profit.  Some websites, like myAutoloan.com, offer the opportunity to receive up to four quotes within minutes of each other.

The capacity for choice here is significant.  Heck, we all want to have choices and this is the best way to get an auto loan and be in control.  The process works for all 3 of the autos we’ve mentioned today – walk into any dealer empowered because you have your financing pre-arranged.   What this means is that you can literally pick and choose the best auto loan deal for you, and in some cases receive a check by courier the next day, ready for you to walk into the dealership as a cash buyer.

Let us know if you’ve come across some good values or give us some ideas on what you would like to hear about – we’ll do our best to accommodate.

myAutoloan.com

Auto loan Delinquencies up by 21.2% (from 2nd QTR year-earlier)

Yesterday, in an article published by the Detroit News, business and marketing research firm Experian Automotive released data that shows auto loans that are 60 days past due rose by 21.2 percent in the second quarter from year-earlier levels.

In the second quarter, 0.80 percent of car loans were 60 to 89 days past due, up from 0.66 percent during the same period in 2008.  Thirty-day delinquencies rose 14.6 percent in the second quarter to 3.06 percent, up from 2.67 percent the previous year.   Combined, 30- and 60-day delinquencies amount to $25.5 billion in loans at risk.

Why is this significant?  That’s because it prompts lenders to tighten their lending criteria.  The result is that it pushes many consumers out of the market altogether.  Sure some buy used but many just drop the purchase to wait out the strict requirements being applied.

Michigan was among only three states to show a reduction in 30-day delinquencies, according to the study’s findings. The other two were Alaska and Nebraska.

At some point the lending markets has to turn so that pent-up demand eases.  However, for right now, it’s a tough market and consumers are not getting much of a break on the cost of financing, that is unless you’ve got a high credit score.  In the meantime, we all wait.

For the balance of the year SAAR (Seasonally Adjusted Annual Rate) figures will probably close the year out at just under 10 million per month annualized.  Next year by February, we should see things starting to break free.  Let’s hope that prediction holds!

The Ongoing Mysteries of the Clunkers Program

In an article distributed by Auto Remarketing, written by Group Editor J. Reed, it recapped Edmunds.com’s analysis of the just concluded “Cash for Clunkers” program statistics provided by the DOT. Why is this important?  As hard as we try to trust our leaders and rely somewhat upon what they say to be true, huge discrepancies keep coming out about what really just happened to the citizenry of the U.S.  It does not make me feel warm and fuzzy, that’s for sure.

So what are some of the discrepancies? Edmunds pointed out what it sees as inconsistencies with the government’s Clunkers statistics. One of the reasons the company delved into these figures is because it says there was an unprecedented wide range in analysts’ sales forecasts, with analysts’ forecasts for the month annualized sales rate at an unprecedented 4 million range. Stands to reason that someone would want to true up the numbers, right?

One of the “mysteries,” as the company calls it, is that the government release said the program took 690,114 clunkers off the road. However, apparently Edmund’s experts tracking the program found that clunker trade-ins never accounted for more than 33.4% of weekly sales. “It is mathematically impossible for there to have been nearly 700,000 new-car sales during the course of the program, given the actual sales numbers announced by automakers who should have no motive to under-report,” said Zhenwei Zhou, Edmunds.com senior statistician.

But now that the numbers are in some of the numbers do not add up.  Apparently, one of the difficulties in forecasting the sales number was due to the midstream change in the Clunkes program, or the fact that the program’s administrators changed the rules allowing dealers to take clunker trades on vehicles that were in transit or on order. “As a result, we’re still seeing clunker deals trickle in and are yet to be counted as sales,” noted David Tompkins, Edmunds.com senior analyst. “We expect that to continue for a few weeks. We expect about 50,000 vehicles will be delivered and counted as clunker sales in September’s sales reports.”

Michelle Krebs, Edmond’s senior analyst noted that the Department of Transportation reported on Aug. 26 that it had received 690,114 Cash for Clunker voucher applications for either $3,500 or $4,500.  As of Sept. 2, she said DOT had not changed that figure.  However, the governments own data doesn’t add up. In its Aug. 26 press release giving the supposed final tally for the program, the DOT gives the total application voucher as well as a breakout of the number of vehicles purchased by category and the number of vehicles traded in by category.

None of these numbers are the same. The overall application number of 690,114 is different from the number of clunkers the government said were turned in under the program — 685,201 — which, in turn, is different form the number of vehicles purchased — 684,941. While the differences are not huge or enough to impact forecasting, they should match. Presumably, the number of clunkers turned in and the number of vehicles purchased should be identical, which should add up to the number of applications.

So why does the clunkers number matter? From an economic standpoint, how many of the clunker trades resulted in sales that wouldn’t have occurred otherwise? Or did it merely pull from behind and pull from future naturally occurring sales. If it did produce incrementally higher sales, what was the cost per vehicle to shareholders? Even more important, sorting Cash for Clunkers data is important for forecasting going forward. Analysts, including those at Edmunds.com, auto companies and other forecasting firms, are trying to determine, what is the true underlying demand for vehicles by retail customers, excluding the clunkers program, and what is the trajectory of vehicles going forward.

What do you think are the government’s data  Credible or not?  How can you believe in anything we are being told?  Too many questions and not any answers.  Tell us what you think.