Posts Tagged ‘auto loans’
Buyers spending more – but taking longer to pay off loans.
by Joseph Szczesny on Mar.22, 2013
U.S. car sales are maintaining a strong pace for March, according to several mid-month reports.
New car sales have remained steady in March and are expected to increase by 8 to 10%, year-over-year, according to new estimates from J.D. Power and Associates.
Using data from a broad network of dealers, Power estimates both retail light-vehicle sales and the total light-vehicle rate are consistent with February’s strong performance market. That would work out to around 12.1 million vehicles by consumers and 15.3 million when fleet buyers are included in the mix.
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Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles. They also tend to be more profitable than fleet sales, especially those to daily rental companies. Most makers have been shifting focus to the retail side of the market – in part because that also tends to prop up residuals, or trade-in values.
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Tags: auto incentives, auto loans, auto news, car incentives, car news, joe szczesny, longer auto loans, march 2013 car sales, march auto sales, march car sales, thedetroitbureau
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They’ve been on the decline but could rise again as more auto loans go delinquent.
by Paul A. Eisenstein on Feb.21, 2013
No, it's not Emilio Estevez coming to reclaim your car.
There’s been plenty of talk about the U.S. housing crisis, foreclosures rising to record levels during the recent recession. But car buyers also struggled to pay their bills and keep the repo man from showing up at their door.
The good news is that loan delinquencies fell sharply since the depths of the nation’s economic downturn and repossessions have likewise dropped sharply. In fact, they hit a 12-year low in 2012, says Manheim Consulting. But another study warns that the trend might soon reverse itself.
For the first time since 2009, the number of 60-day auto loan delinquencies increased during the fourth quarter of 2012, warns Experian Automotive, and with lenders writing more of the risky, subprime car loans that slammed the industry during the recession, the repo man could soon get busy again.
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For the time being, he’s sitting on his hands, repossessions fell by 27.6% during the fourth quarter, says a new Experian report, accounting for just 0.46% of outstanding auto loans. That was true no matter who issued the loan, banks, credit unions, “captive” or automaker-operated finance companies, or other lenders.
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Tags: auto loans, auto news, auto repo, auto repos, auto repossession, car news, car repos, experience automotive, late auto loans, loan delinquencies, manheim consulting, paul a. eisenstein, paul eisenstein, repo man, thedetroitbureau
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Plan could improve sales, cut costs for dealers.
by Joseph Szczesny on Feb.11, 2013
Chrysler hopes to move more sheet metal -- like this 2014 Jeep Grand Cherokee -- with the help of its new finance operation.
Chrysler will soon be back in the financial services business for the first time since its 2009 bankruptcy.
The maker will launch launch a new partnership with Santander Consumer USA Inc., of Dallas, this coming spring to offer “a full spectrum of auto financing services to Chrysler Group and FIAT customers and dealers under the name Chrysler Capital.”
The move, company officials hope, will make it easier to compete with the likes of Ford and Toyota which turn to their in-house financial services subsidiaries to help offer affordable credit to customers – and more competitive financing alternatives for dealers.
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“We expect Chrysler Capital to help Chrysler Group continue its sales growth by offering consumers the most competitive and innovative retail purchase and lease financing available in the marketplace,” said Peter Grady, Vice President of Network Development and Fleet for Chrysler Group, following a meeting with retailers at the National Auto Dealers Association’s annual meeting in Orlando, Fla.
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Tags: auto loans, auto news, car loans, car news, chrysler ally, chrysler bank, chrysler financial, chrysler financial services, chrysler loans, chrysler nada, chrysler news, chrysler santander, financial services, paul a. eisenstein, paul eisenstein, thedetroitbureau
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Incentives also increase.
by Paul A. Eisenstein on Dec.05, 2012
Hyundai boasted the lowest incentives -- and the lowest transaction prices -- last month.
If you bought a car in November odds are you paid more than you would have at almost any time in the past year. Transaction prices – what motorists actually spend after working in incentives and factory options – are at or near record levels.
That’s despite the fact that many manufacturers increased givebacks last month, hoping to keep sales momentum going. They’ve also been working with lenders to ensure that credit continues to become more readily available – though motorists have been stretching out loans and are now taking an average of 64 months to pay off a car purchase.
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“Industry average transaction prices climb once again with consumers’ continued appetite for highly contended vehicles,” said Jesse Toprak, Senior Analyst at the data tracking service TrueCar. “Today’s consumers value a nicely equipped vehicle as much as they do a low cost of ownership. Automakers are getting better at providing all the modern conveniences consumers come to expect for more of their models, resulting in higher overall prices hence improved profitability.”
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Tags: auto financing, auto incentives, auto loans, auto news, auto rebates, auto sales, auto transaction prices, car incentives, car loans, car news, car sales, november 2012 car sales, paul a. eisenstein, paul eisenstein, thedetroitbureau
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by Paul A. Eisenstein on Sep.07, 2012
More subprime buyers are finding loans again.
Last month’s unexpectedly strong automotive sales numbers run counter to most other recent U.S. economic trends and buoy hopes the nation will escape a double-dip recession.
While a variety of factors appear to be propping up automotive demand – despite earlier forecasts of a slowdown – one key reason for the sales surge appears to be increasing availability of financing, especially for so-called subprime buyers.
During the depths of the recession, when U.S. new car sales slipped to a crushing 10.5 million low in 2009, even those with the best credit scores found it difficult to get financing and leases all but vanished. Now, however, the financing situation has turned around.
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In fact, there were more subprime loans written in the second quarter of 2012 than in the period before the nation’s economic collapse, according to financial tracking firm Experian Automotive.
But is that posing the risk of future problems down the line, especially if the continuing high jobless rate leads to higher loan defaults?
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Tags: auto financing, auto lease, auto lending, auto loan defaults, auto loans, auto news, car loans, luxury cars, paul a. eisenstein, paul eisenstein, subprime, subprime loans, thedetroitbureau
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Sub-prime lending regaining momentum.
by Joseph Szczesny on Aug.10, 2012
Auto loan delinquency and reposession rates are dropping fast, according to a new study.
Auto buyers are doing “an excellent job” of keeping current on their loan payments, a significant improvement from just a few years ago when delinquencies and repossession rates were soaring, noted a major credit tracking service.
Experian Automotive reports consumers continued to make timely automotive loan payments during the second quarter of 2012, lowering the average delinquency rate across all lending organizations, including banks, captive finance arms, finance companies and credit unions.
The falling delinquency rate has encouraged automakers to take on more “sub-prime” loans in recent months, broadening the industry’s sales base. It’s also helped reduce losses at companies such as Ally Bank, formerly GMAC, Ford Motor Credit and GM Financial and other captive auto finance companies.
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The new report serves up some good news for lenders and consumers alike, especially when there are worrisome signs that home foreclosures are again on the rise.
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Tags: auto loan delinquencies, auto loan repossessions, auto loans, auto news, auto reposessions, car loans, car news, experian automotive, paul a. eisenstein, paul eisenstein, subprime car loans, thedetroitbureau
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Sub-prime lending returns – for those willing to pay the price.
by Paul A. Eisenstein on May.31, 2012
Lenders are returning to the automotive market, according to a new study.
Even in the depths of the Great Recession there were plenty of folks willing and seemingly able to buy new cars. The problem for many was a lack of loans. Banks and other lenders all but shut off the spigot, refusing to do business, in some cases, with even the most credit-worthy customers.
While financing still isn’t quite as readily available as it was during the bubble years – when some lenders were willing to offer so-called NINJA loans, for those with no income, no jobs or assets – consumers are once again beginning to find credit easing up, according to a survey by Experian Automotive.
The good news for both new and used car shoppers is that loans are not only more readily available they’re also being offered at lower rates. Experian’s latest survey also found lenders beginning to wade back into the waters of sub-prime lending – though shoppers with risky credit histories are paying substantially higher rates.
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“During the first quarter of 2012, car shoppers definitely found more favorable conditions for their vehicle loans,” said Melinda Zabritski, director of automotive credit for Experian, which tracks lending and credit. “A reduction in average credit scores, lower interest rates and a lengthening of loan terms are all very good signs for the market and offer great opportunities for consumers looking to make a deal on a new or used vehicle.”
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Tags: auto buying, auto lenders, auto lending, auto loan interest rates, auto loans, auto news, car buying, car loans, car news, experian auto loans, experian car loans, paul a. eisenstein, paul eisenstein, subprime auto loans, super-prime auto loans, thedetroitbureau
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Renewing focus on autos – and paying back a bailout.
by Joseph Szczesny on May.15, 2012
Ally, the former GMAC, shifts focus back to auto loans.
Ally Financial Inc. the nation’s largest automotive lender, has placed its money-losing mortgage subsidiary into bankruptcy – a move that actually could free it up to stage a much-anticipated IPO.
The bankruptcy filing was part of series of strategic actions aimed at strengthening the company’s longer-term financial profile and accelerating repayment of the U.S. Treasury’s loans that bailed out Ally when it was still operating as the General Motors Acceptance Corp.
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The subsidiary, known as Residential Capital, or ResCap, has been saddled with billions of dollars of so-called “toxic” loans generated during the bubble economy that came crashing down in 2008 and 2009, sinking a number of home lenders.
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Tags: ally, ally auto loans, ally bailout, ally bank, ally bankruptcy, ally ipo, auto loans, auto news, car news, gm news, gmac, joe szczesny, rescap bankruptcy, rescap chapter 11, thedetroitbureau, toxic mortgages
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“A reversal in payment patterns.”
by Paul A. Eisenstein on Mar.29, 2012
Consumers may be slipping on the credit card and mortgage bills but a new study finds they're trying to keep up on the car loan.
The weak economy and high unemployment have stretched the budget to the breaking point for many Americans. Struggling to decide which bills they can pay, a new study finds a surprising number of people will go delinquent on mortgage and credit card bills before lapsing on their monthly car loans.
Traditionally, American consumers have put a high priority on paying their mortgage on time, no surprise since losing one’s home is a life-changing experience. Credit card debt, with traditionally high interest rates, have followed close behind. But at a time when people may need a car more than ever simply to find a job, there has been a “reversal in payment patterns,” according to TransUnion Vice President Ezra Becker.
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“With unemployment remaining high and real estate values remaining stagnant or further depreciating, consumers continued to pay their credit cards ahead of their mortgages,” said Becker, who is in charge of research and consulting at TransUnion’s financial services business unit. “However, the importance of their auto loans appears to have trumped even the value they place on their credit cards.”
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Tags: auto loan delinquency, auto loans, auto news, car loans, car news, consumer debt, consumer loans, home foreclosures, loan delinquency, loan payments, mortgage foreclosures, paul a. eisenstein, paul eisenstein, thedetroitbureau
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Separate study finds auto lending market loosing up.
by Joseph Szczesny on Feb.29, 2012
Automakers stand to benefit from the rise in consumer sentiment - and an upturn in lending.
A sharp rise in consumer confidence – which helped drive the Dow Jones Industrial Average to a 13,000 close for the first time since 2008 – is likely to also help push the auto industry towards a faster recovery than initially expected.
Consumer confidence, which is also one of the key indicators for car sales, remained strong in February due to a record number of consumers who were aware of ongoing increases in jobs, says University of Michigan economist Richard Curtin, director of the Thomson Reuters/University of Michigan Surveys of Consumers.
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A separate study further buoyed prospects for the auto industry by showing that lenders continue freeing up more cash for potential buyers.
February marked the sixth consecutive month of gains in the Sentiment Index as consumers became more positive about prospects for the economy. But there was a downside, researchers warned.
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Tags: auto lending, auto loan availability, auto loans, auto news, auto sales, car loans, car news, car sales, consumer sentiment, joe szczesny, loan default rate, thedetroitbureau, university of michigan consumer sentiment, us car sales
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