The Industry's Leading Source For F&I, Sales And Technology


Lanes Open for Prime Tiers

June 2010, F&I and Showroom - Feature

by Melinda Zabritski

During the first quarter, like vehicle sales, the auto finance market continued to show signs of a rebound from the shakeup of 2009. However, first-quarter results also revealed a market that remains restrictive to the outside-of-prime credit tiers.

New-vehicle financing showed signs of a pickup from the year-ago period, with the percentage of new financing during the quarter increasing 4.8 percent to 33.38 percent of the overall market. The percentage of used-vehicle financing, however, declined 2.2 percent from the year-ago period to 66.62 percent.

Prime customers continued to draw the lion’s share of new and used financing during the quarter. Average amount financed increased, loan terms stabilized and average rates decreased. The overall improvements in the first quarter are encouraging for the rest of the year, but challenges remain.

Risk Distribution Remains Unchanged

Risk distribution of open automotive loans continued to mirror what’s happened over the last few years, with more loans falling into the low-risk prime and superprime segments. In the first quarter, the percentage of consumers who fell into the combined prime segments increased 2.55 percent to 61.9 percent of all open automotive loans. 

The deep subprime category realized the greatest year-over-year decrease, falling 7.62 percent to 14.5 percent of all automotive loans. The subprime and nonprime segments dropped by 2.71 and 0.72 percent, respectively, bringing their percentage of automotive loans to 8.6 percent and 15 percent.

Prime Push Leads to Delinquency Improvement

With lenders showing a preference toward prime customers, the 60-day delinquency rate decreased 0.82 percent on a year-over-year basis to 0.78 percent. Bear in mind that, while the actual decrease in the delinquency rate is still relatively small, the total dollar balance associated with these loans has decreased by 19.8 percent, bringing the total 60-day balance to just over $1 billion.

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  


So Here's the Deal

Ronald J. Reahard
Sharing the Profit

By Ronald J. Reahard
After losing members of his sales team, a dealer asks the magazine’s resident F&I expert for his take on paying salespeople on F&I income.

Menus Don’t Work Miracles

By Ronald J. Reahard
A fancy new menu can help streamline processes and improve customer engagement, but it won’t replace the hard-won skill and compassion of a true F&I professional.

Avoiding the AAA Objection

By Ronald J. Reahard

(Video) Capture Missed VSC Sales

By Ronald J. Reahard

Done Deal

Gregory Arroyo
GAP Suffers Another Setback

By Gregory Arroyo
The editor reveals the truth behind an NPR report critical of the industry’s efforts to undo the Military Lending Act guidance that put the brakes on GAP sales.

Car Buyers Need F&I

By Gregory Arroyo
Current market trends are playing right into the F&I product pitch, but they also reveal trouble ahead for the automotive retail industry at large.

Protecting F&I’s Future

By Gregory Arroyo

Game Almost Over

By Gregory Arroyo

Mad Marv

Marv Eleazer
Comply Like Nobody’s Watching

By Marv Eleazer
His Madness wants F&I pros to commit to ethical dealings with customers and finance sources because it’s the right thing to do, not just for the very real threat of reprisal.

'We Never Buy This Stuff'

By Marv Eleazer
Every F&I pro gets the occasional ‘F’ customer, but they’re a small part of your business and they’re not worth a minute of mental anguish.

Stop Painting Dealers With a Broad Brush

By Marv Eleazer

I Love F&I. How About You?

By Marv Eleazer

On the Point

Jim Ziegler
Bound to Fail

By Jim Ziegler
Da Man returns with a message to vehicle manufacturers jumping into the subscription waters: It ain’t gonna happen.

Sharpen Your Survival Skills

By Jim Ziegler
‘Da Man’ has a plan you can use to survive the collapse of the car business and remain profitable through the dealer apocalypse.

Sales Rock Stars Still Exist

By Jim Ziegler

The New Stooges

By Jim Ziegler