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


Fourth-Quarter Push

April 2011, F&I and Showroom - Feature

by Melinda Zabritski

Driven by further declines in 30- and 60-day delinquencies, the auto finance market continued to stabilize in the end-of-year quarter of 2010. And with consumers continuing to improve their repayment patterns, lenders made it clear they’re ready to loosen up their lending standards.

Illustrating the more aggressive posture on the part of lenders was the increase in the share of loans made to credit-challenged customers. The market, however, remains more conservative than what was seen in 2007 and 2008; nevertheless, it’s clear lenders are feeling a lot better these days.

The following analysis will provide a snapshot of consumer activity during fourth quarter of 2010, as well as a comparison with the prior year.

Risk Distribution Reveals Conservative Posturing

A key indicator of the overall health of the automotive finance market is the distribution of risk among all open loans. And as a reminder, Experian Automotive uses five risk segments to classify consumer loans: superprime (740+), prime (680–739), nonprime (620–679), subprime (550–619) and deep subprime (<550).

Over the last several years, the low-risk prime and superprime segments have garnered the majority of automotive loans, and that remained the case in the fourth quarter. During that period, the two segments accounted for 62.9 percent of all open automotive loans, up from 60.8 percent in the fourth quarter of 2009. 

The highest risk segment, deep subprime, experienced a significant year-over-year drop in share, falling to 12.6 percent in the fourth quarter from 15.3 percent in the year-ago period. Subprime, however, showed a slight increase, inching up to 8.9 percent from 8.8 percent in the year-ago quarter. Nonprime also showed an increase, growing from 15.2 percent in the fourth quarter of 2009 to 15.7 percent.

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