Automotive News - March 9, 2009 - (Page 19) FEBRUARY 9, 2009 • 19 finance & insurance Jaguar: Inventory lending will be case by case Lindsay Chappell lchappell@crain.com NEW ORLEANS — Jaguar says its new finance company, Chase Auto Finance, will work with dealerships individually rather than collectively to provide inventory lending. Chase became Jaguar’s retail finance company last week, when the brand ended its long relationship with Ford Motor Credit Co. Gary Temple, president of Jaguar Land Rover North America LLC, said dealers’ financing arrangements with Chase generally will be similar to their Ford Credit plans, “with some improvements.” Jaguar Land Rover’s Gary Temple: “Each dealer will have to take on their floorplanning needs on their own.” At the same time, “Each dealer will have to take on their floorplanning needs on their own,” Temple told about 70 dealers at last month’s National Automobile Dealers Association convention here. Temple said Chase has agreed to help some dealers finance their in- ventories. But no broad floorplanning program will be offered to the dealer body, he said. Chase spokeswoman Mary Kay Bean told Automotive News that the bank will floorplan Jaguar dealers “on a case-by-case basis.” The change of lenders is part of Jaguar’s separation from Ford Motor Co. Ford sold Jaguar and Land Rover last year to Tata Motors of India. Chase has provided floorplan financing to franchised dealers since 1986. Temple said a dealer committee has worked to make the changeover from Ford Credit to Chase as seamless as possible for Jaguar dealers. Ken Gorin, a multifranchise luxury dealer in suburban Miami who heads the Jaguar Business Operations Council, said he expects Chase to provide some floorplan financing as well as retail financing. Gorin said a previous Jaguar floorplan assistance program “will go away” with the move to Chase. c Diana T. Kurylko contributed to this report INCREASE YOUR SALES BY 50% OR MORE FOR NO UPFRONT COST! AFTER 25 YEARS, OUR PROGRAM IS PROVEN! OUR INTENSE TRAINING TEACHES HOW TO: * Handle the phone properly to increase ups. * Prospect successfully in this weakened economy. * Turn a shopper into a sale. * Increase CSI, etc “THE WORLD IS OURS IN RECRUITING & TRAINING” Honda Finance boosts floorplan credit American Honda Finance Corp. is providing vehicle inventory financing to more dealerships, even as many banks are canceling floorplan credit lines. Honda Finance also remains committed to retail leasing, says Stephen Smith, the company’s senior vice president. Smith, 60, spoke with Staff Reporter Donna Harris at the American Financial Services Association’s annual auto finance conference last month in New Orleans. How many floorplan accounts do you have? How many are you going to add? We floorplan 210 dealers. We will add 90 dealers this year. Why are you increasing floorplan lending? We are growing the floorplan side questionanswer American Honda Finance’s Stephen Smith: “We are growing the floorplan side of the business.” of the business as many banks have gotten out of that business. Requests have come in from our dealers. Will you accommodate every dealer who asks for inventory financing? We are doing it selectively. We have said to dealers: If you have other alternatives, we would like you to go further back in the line. If the dealers got a letter from their lender to find another floorplan source, we are talk- ing to those dealers first. Why do you remain in the lease business when others have left it? We still believe in leasing. We think we can do it successfully because we have a product that holds its value. Leasing is more critical on the luxury side. Certain products lend themselves to leasing. What’s your lease penetration rate, and how has it changed? Our penetration hasn’t changed much. Honda is around 19 percent, and Acura is about 36 percent. Do you see evidence that leasing will make a comeback? People got out because the usedcar market crashed. It started with trucks and then spread to all vehicles. We have seen a slight rebound in used-car values. c WORLD WIDE CONSULTING SERVICES CALL @ 800 - 722 - 8482 # NEW Lombardo Perez, Jr. & Lombardo Perez, Sr. Congratulations, Metro Ford Miami METRO FORD MSA will show you what’s working around the country and how to dominate your market! 1 FORD DEALER! www.MetroFordLM.com Paul Rosen CAR AND TRUCK Martin Schleifer For a presentation, call Paul at 305-495-6100 or e-mail: paul@MSAadvertising.com 2915 SW 27th Avenue • Coconut Grove, Florida 33133 • 305-442-7272 • MSAadvertising.com Manheim lends floorplan hand in a pinch Lindsay Chappell lchappell@crain.com NEW ORLEANS — Manheim, the nation’s largest auto auction company, is helping some franchised dealers finance their used-vehicle inventories. But Manheim CEO Dean Eisner insists his company doesn’t want to stay in that part of the floorplanning business. Manheim wholesaled about 10 million used vehicles last year. For years it has provided short-term floorplan loans to used-car lots. In recent months, Eisner says, the credit crunch has created problems for some new-vehicle dealers in floorplan- ning shipments of used cars and trucks they bought at Manheim auctions. Manheim stepped in to help finance those sales, he says. But Manheim generally has avoided floorplanning newvehicle dealers, Eisner told Automotive News last month in an interview at the National Automobile Dealers Association convention here. Independent retailers remain Manheim’s base of financing customers, he says. Manheim, of Atlanta, has a loan portfolio of about $800 million. The company makes short-term loans to nearly 14,000 independent dealers. c ACTION EVENT WEEKEND: DULUTH, GA AVG WEEKEND: 18 UNITS NISSAN DEALER 51 UNITS 36 UNITS 33 UNITS INDEPENDENT DEALER Credit unions push auto loans LOS ANGELES — Credit Union Direct Lending and CUcorp have launched a program to encourage consumers to finance purchases of new General Motors and Chrysler LLC vehicles through credit unions. The venture promotes “Invest in America,” a partnership of GM, Chrysler and 8,000 credit unions. The program seeks to make dealers and consumers aware of low-rate auto financing available from credit unions, along with discounts offered to credit union members by GM and Chrysler. Sponsors say the program has led to more than 25,000 vehicle sales since Jan. 7. Credit Union Direct Lending, of Rancho Cucamonga, Calif., works with more than 9,000 dealerships and 700 U.S. credit unions. CUcorp, a marketing company in suburban Detroit, is a subsidiary of the Michigan Credit Union League. Loan approval rates plunge NEW ORLEANS — Auto lenders are rejecting more credit applications than they did a year ago, according to RouteOne and DealerTrack. Raj Sundaram, senior vice president of DealerTrack, said at an industry conference here that in 2007, lenders approved credit for subprime auto customers about two-thirds of the time. But in the fourth quarter of 2008, Sundaram said, that rate fell to 14 percent, a record low. RouteOne CEO Mike Jurecki said that even though the number of credit applications rose in 2008, the approval rate dropped sharply from 2007. Both RouteOne and DealerTrack enable dealerships to tap networks of auto lenders to fund vehicle loans. ACTION EVENT WEEKEND: TUCSON, AZ AVG WEEKEND: 16 UNITS MULTI-FRANCHISE DEALER ACTION EVENT WEEKEND: RIVERHEAD, NY AVG WEEKEND: 15 UNITS MULTI-FRANCHISE DEALER ACTION EVENT WEEKEND: INCLUDING 75K INSERTS. 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