Automotive News - September 8, 2008 - (Page 30) 30 • SEPTEMBER 8, 2008 finance & insurance Study: Nonprime car loans get longer Donna Harris dharris@crain.com Consumers with the riskiest credit are taking out longer auto loans, a new study suggests. So-called nonprime buyers seek to “keep car payments affordable” in a tough economy, said Jack Tracey, executive director of the National Automotive Finance Association. The Hanover, Md., trade group, which represents lenders that serve customers with tarnished credit, sponsored the study. In 2007, 91 percent of nonprime new-vehicle loans were for more than 60 months, says the study, which surveyed 26 key lenders. During the previous year, 85 percent of nonprime loans were for more than 60 months. For used cars and trucks, the study found, 60 percent of nonprime loans Jack Tracey of the National Automotive Finance Association: Subprime buyers “are the first to get laid off.” were for more than 60 months, up from 53 percent in 2006. Many nonprime loan customers owe money on their trade-ins and must roll that debt into their next vehicle loan, Tracey told Automotive News. According to the study, nonprime lenders have tightened credit standards, making loans to a smaller percentage of applicants. Those tougher standards are showing up in higher credit scores. Last year, the average credit score for a Delayed maturity The percentage of vehicle loans longer than 60 months that were made to buyers with credit problems grew last year, a new study suggests. 2007 2006 New-vehicle loans Used-vehicle loans 91% 60% 85% 53% Source: National Automotive Finance Association customer taking out a nonprime new-vehicle loan was 570, up from 563 in 2006. For nonprime used-vehicle loans, the average credit score in 2007 was 542, compared with 537 the previous year. For all U.S. consumers, the average credit score is about 692 on a scale of 300 to 850. The slumping economy also is reflected in more bankruptcies on nonprime loans. Lenders surveyed for the study said 2.55 percent of their accounts became bankrupt in 2007, up from 2.09 percent in 2006. Losses from vehicle repossessions also climbed in 2007, the study said, to $6,824 per vehicle from $6,804 in 2006. “A tough economy is most quickly reflected in the portfolios of nonprime lenders,” Tracey said. “Subprime customers are the first to get laid off and first to struggle with their bills.” The study surveyed 26 nonprime lenders this year. The lenders have 3.1 million accounts and $39.8 billion in outstanding finance contracts. c Honda touts leasing while others fall back Alysha Webb awebb@crain.com BMW, Edmunds team up on loan site for consumers WOODCLIFF LAKE, N.J. — A Web site operated by BMW Financial Group Services of North America, www.up2drive.com, is a new auto finance offering on the Edmunds.com automotive consumer site. The BMW captive’s site enables consumers to apply and be approved for a vehicle loan. A service on the site allows consumers to negotiate with dealers and private sellers. The site also offers consumer information on buying, refinancing and selling cars and trucks. Edmunds.com links to up2drive. BMW Financial Services, of Woodcliff Lake, finances most BMW vehicles sold or leased in the United States. The captive has 700,000 customers and more than $28 billion in assets. LOS ANGELES — Leasing hasn’t become a bad word to all vehicle lenders, despite recent well-publicized pullbacks from the U.S. lease market by some automakers’ captive finance companies. American Honda Finance Corp., the captive of American Honda Motor Co. Inc., is the fourthlargest U.S. auto lender overall with 4.95 percent of the market, according to a new study by the AutoCount unit of Experian Automotive. But in the first half of 2008, Honda Finance was the No. 2 auto lessor, behind only GMAC Financial Services, AutoCount says. Honda spokesman Chris Martin said the company uses leasing “as a means of incentivizing sales when inventories are getting a little high” on certain models. Late last month, Honda’s Web site, www.honda.com, featured special lease deals on several versions of the Accord mid-sized sedan, the Ridgeline mid-sized pickup, the Pilot and Element crossovers and the Odyssey minivan. Leasing tends to attract consumers who are “a little more price-conscious,” Martin told Automotive News. Honda dealers say company executives tell them that consumers who lease Honda cars and trucks Dealers say Honda is pushing leases of Accords. tend to be more loyal customers than are buyers. Honda especially emphasizes leases of Accords, dealers add. Dan Roward, general sales manager of Honda of Santa Monica in suburban Los Angeles, says Accord leases are helping his dealership retain customers amid a shortage of Honda Civic small cars. “We’ve switched many people” who wanted to buy a Civic to an Accord lease, Roward says. Overall, leases account for one of every five new vehicles sold at retail. Martin declined to disclose the nationwide percentage of Honda new-vehicle sales that are leases. But dealers say Honda’s lease penetration rate in Southern California is about 38 percent. At Honda of Santa Monica, Roward says, the leasing rate is about 65 percent.c Dealer CPA group picks leader NASHVILLE — Ira Silver is the new president of the CPA Auto Dealer Consultants Association. The trade group represents accounting firms that work with more than 1,200 U.S. auto dealerships. Silver had been vice president of the association. He is partner in charge of the Orlando, Fla., office of the accounting firm Morrison, Brown, Argiz & Farra LLP. Silver specializes in dealership acquisitions and sales. http://www.up2drive.com http://Edmunds.com http://Edmunds.com http://www.honda.com http://www.cso.com http://www.cso/com
Table of Contents Feed for the Digital Edition of Automotive News - September 8, 2008 Chrysler Financial hikes dealer floorplan fees Back in business? Detroit's best bets for cash: Feds, UAW Document fee suits swamp Missouri dealers Honda's family squabble Used truck prices rebound Ford mulls Lincoln compact Toyota delays RAV4 plan Proposed flex-fuel mandate roils industry Chrysler sues consultant over sourcing Cobalt transaction prices are up $775 since April Nissan looks to Mexico for engineering aid To retain truck buyers, Nissan offers more stuff Press: Chrysler is pushing forward on electric cars Leasing falls to 4-year low GM: Currency shift stalled Astra Dealers say they can sell the Republican ticket Industry loans clash with GOP climate Grand Cherokee will get axles from new plant Makers must resist urge to backslide as gas price dips Times are tough outside the U.S., too Chevrolet does tout its small cars Let natural gas power the fuel cell A crash course in collaboration Dodge wouldn't rush the RamBox Plastics are losing cost advantage Suppliers expect to benefit from tougher CO2 rules 'People just want Ford to go' For now, Honda will skip electric vehicles Toyota, Subaru enter race to market electric vehicles China exports squeezed Study: 15% of wrecked autos got washed titles Mercedes megadealer is bullish on luxury Sheehy: 'We are not in business for nostalgia' Automakers use driving schools as marketing tools Dodge smoothes Ram's rough edges â a little Honda touts leasing while others fall back Alysha Webb Study: Nonprime car loans get longer Dealer CPA group picks leader BMW, Edmunds team up on loan site for consumers Va. Honda dealership loses protest bid Judge throws out deceptive-ads lawsuit against Toyota in Arkansas Mo. dealership's protest gets go-ahead Pa. court throws out suit against Ford, dealership Dealers Ross' interiors company pushes into China, India More than a game Nissan's Tavares: Green conference keynoter Quality group seeks to set consulting standards Personnel Dana to shift HQ by Sept. '09 Tenneco to supply Volvo XC60 BMW gets Siemens conveyors IAC to cut 280 jobs in Sweden Polytec to acquire Peguform Metaldyne to sell Italy operation Federal-Mogul to build India plant Beck, Delphi make pact TRW to supply Chinese sedan Auto profits rise in Russia Black Book expands data Hayes Lemmerz cuts losses Ford: Buyouts are a tough sell GM's party plans include production Volt An ice-cold August for auto sales Big drop in Aug. output Lights, camera . . . Volt? In case the roads get too quiet . . . The Insight rides again Lagonda brand will be back Milwaukee road trip: No old pals, but 1 new lesson Choice of Odell seen as Ford vote of confidence in Volvo Dana sort of wins an award Automotive News - September 8, 2008 Automotive News - September 8, 2008 - (Page Introducti) Automotive News - September 8, 2008 - Detroit's best bets for cash: Feds, UAW (Page 1) Automotive News - September 8, 2008 - Detroit's best bets for cash: Feds, UAW (Page 2) Automotive News - September 8, 2008 - Toyota delays RAV4 plan (Page 3) Automotive News - September 8, 2008 - Cobalt transaction prices are up $775 since April (Page 4) Automotive News - September 8, 2008 - Cobalt transaction prices are up $775 since April (Page 5) Automotive News - September 8, 2008 - GM: Currency shift stalled Astra (Page 6) Automotive News - September 8, 2008 - GM: Currency shift stalled Astra (Page 7) Automotive News - September 8, 2008 - Grand Cherokee will get axles from new plant (Page 8) Automotive News - September 8, 2008 - Grand Cherokee will get axles from new plant (Page 9) Automotive News - September 8, 2008 - Grand Cherokee will get axles from new plant (Page 10) Automotive News - September 8, 2008 - Grand Cherokee will get axles from new plant (Page 11) Automotive News - September 8, 2008 - Let natural gas power the fuel cell (Page 12) Automotive News - September 8, 2008 - Let natural gas power the fuel cell (Page 13) Automotive News - September 8, 2008 - Plastics are losing cost advantage (Page 14) Automotive News - September 8, 2008 - Plastics are losing cost advantage (Page 15) Automotive News - September 8, 2008 - Suppliers expect to benefit from tougher CO2 rules (Page 16) Automotive News - September 8, 2008 - 'People just want Ford to go' (Page 16A) Automotive News - September 8, 2008 - Toyota, Subaru enter race to market electric vehicles (Page 16B) Automotive News - September 8, 2008 - Toyota, Subaru enter race to market electric vehicles (Page 16C) Automotive News - September 8, 2008 - Toyota, Subaru enter race to market electric vehicles (Page 16D) Automotive News - September 8, 2008 - For now, Honda will skip electric vehicles (Page 17) Automotive News - September 8, 2008 - For now, Honda will skip electric vehicles (Page 18) Automotive News - September 8, 2008 - For now, Honda will skip electric vehicles (Page 19) Automotive News - September 8, 2008 - Study: 15% of wrecked autos got washed titles (Page 20) Automotive News - September 8, 2008 - Study: 15% of wrecked autos got washed titles (Page 21) Automotive News - September 8, 2008 - Mercedes megadealer is bullish on luxury (Page 22) Automotive News - September 8, 2008 - Mercedes megadealer is bullish on luxury (Page 23) Automotive News - September 8, 2008 - Sheehy: 'We are not in business for nostalgia' (Page 24) Automotive News - September 8, 2008 - Sheehy: 'We are not in business for nostalgia' (Page 25) Automotive News - September 8, 2008 - Sheehy: 'We are not in business for nostalgia' (Page 26) Automotive News - September 8, 2008 - Sheehy: 'We are not in business for nostalgia' (Page 27) Automotive News - September 8, 2008 - Automakers use driving schools as marketing tools (Page 28) Automotive News - September 8, 2008 - Dodge smoothes Ram's rough edges â a little (Page 29) Automotive News - September 8, 2008 - BMW, Edmunds team up on loan site for consumers (Page 30) Automotive News - September 8, 2008 - BMW, Edmunds team up on loan site for consumers (Page 31) Automotive News - September 8, 2008 - Judge throws out deceptive-ads lawsuit against Toyota in Arkansas (Page 32) Automotive News - September 8, 2008 - Pa. court throws out suit against Ford, dealership (Page 33) Automotive News - September 8, 2008 - Dealers (Page 34) Automotive News - September 8, 2008 - More than a game (Page 35) Automotive News - September 8, 2008 - Personnel (Page 36) Automotive News - September 8, 2008 - TRW to supply Chinese sedan (Page 37) Automotive News - September 8, 2008 - TRW to supply Chinese sedan (Page 38) Automotive News - September 8, 2008 - Auto profits rise in Russia (Page 39) Automotive News - September 8, 2008 - Auto profits rise in Russia (Page 40) Automotive News - September 8, 2008 - Auto profits rise in Russia (Page 41) Automotive News - September 8, 2008 - Auto profits rise in Russia (Page 42) Automotive News - September 8, 2008 - Auto profits rise in Russia (Page 43) Automotive News - September 8, 2008 - Auto profits rise in Russia (Page 44) Automotive News - September 8, 2008 - GM's party plans include production Volt (Page 45) Automotive News - September 8, 2008 - GM's party plans include production Volt (Page 46) Automotive News - September 8, 2008 - An ice-cold August for auto sales (Page 47) Automotive News - September 8, 2008 - An ice-cold August for auto sales (Page 48) Automotive News - September 8, 2008 - Big drop in Aug. output (Page 49) Automotive News - September 8, 2008 - Dana sort of wins an award (Page 50) Automotive News - September 8, 2008 - Dana sort of wins an award (Page 51) Automotive News - September 8, 2008 - Dana sort of wins an award (Page 52)
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