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JPMorgan’s Dimon Fearful of Auto Lending Future

Rising subprime loans, slowing sales concern banker.

by on Jun.06, 2016

JPMorgan Chase Chief Executive Jamie Dimon expressed concern about automotive lending in the near future.

JPMorgan Chase & Co. has put out the caution flag on auto lending.

Jamie Dimon, JPMorgan’s chief executive and perhaps the most influential banker in the U.S., said during a conference the market for U.S. automobile lending is “a little stressed” and that he foresees higher losses for some competitors.

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“Someone will get hurt in auto lending,” but not JPMorgan, Dimon said Thursday during an investor presentation in New York. (more…)

Automakers Bankrolling Half of New Car Purchases

Record auto sales means big money for financing arms

by on Dec.02, 2015

Car buyers are using the captive finance arms of automakers more than half the time for their vehicle financing.

The soon-to-be-record-setting automotive sales year is not only benefitting the bottom line for automakers, but also their captive finance arms that are now handling more than half of all new vehicle sales.

The automaker’s finance companies bankrolled 51.6% of new vehicle loans in the third quarter of 2015, up from 36.8% in Q3 2011. This represents the largest marketshare of new vehicle financing for captives since the recession of 2008, according to Experian Automotive’s State of Automotive Finance report.

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“Captive lending has made a comeback since suffering a steep drop-off caused by declining new sales and lender-type shifts during the recession,” said Melinda Zabritski, Experian’s senior director of automotive finance. (more…)

Chrysler Launches “Bottom Line” Incentives

Automaker hopes to counter consumer fears about bankruptcy.

by on May.06, 2009

Can America's credit unions -- and up to $6,000 in new cash incentives -- help reverse Chrysler's steady sales decline?

Can America's credit unions -- and up to $6,000 in new cash incentives -- help reverse Chrysler's steady sales decline?

With consumers steering clear of its showrooms, worried about the impact of the automaker’s bankruptcy, Chrysler LLC is launching a new round of incentives that could shave up to $6,000 off the “bottom line” cost of a new vehicle.

To expand the appeal of the “Invest in America” program – and to help the maximum number of potential buyers qualify for loans – the bankrupt maker is partnering with 1,500 U.S. credit unions, as part of the program.

All buyers qualify for $4,000 “Consumer Cash” on 2009 Chrysler, Dodge and Jeep vehicles.  Another $1,000 will be added to the pot for current Chrysler owners purchasing most of the automaker’s leftover 2008 and current ’09 models.  And for those who finance their vehicles through a participating credit union, Chrysler will kick in another $1,000.  The incentives are available through June 1st.

“Consumers are telling us that the net purchase price of the vehicle is the most important factor right now, so we are pleased to introduce incentives that address what the consumer is looking for,” said Steven Landry, Executive Vice President North American Sales and Marketing, Global Service and Parts – Chrysler LLC, in a statement released by Chrysler.

While the auto industry, as a whole, is down sharply, this year, Chrysler is facing particularly serious problems luring buyers into its showrooms.  Industry data suggest that even potentially loyal buyers are worried about purchasing a vehicle from a bankrupt company.  A study by CNW Marketing found little changed when President Barack Obama, in late March, announced that the government would back the warranty programs of both Chrysler – which went into Chapter 11 on April 30th — and General Motors – the latter maker also facing the threat of bankruptcy, next month.    (more…)