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


Balancing Act

Auto finance continues to balance the need to manage risk with the need to fuel the industry’s resurgence. So far, so good, according to Experian Automotive’s latest report.

July 2013, F&I and Showroom - Feature

by Melinda Zabritski

A quick scan of several important automotive credit metrics might bring with it a strong sense of  déjà vu. Delinquencies and repossessions continued to climb, average credit scores continued to drop, finance sources continued to welcome credit-challenged customers and leasing rates reached a record high.

The good news is delinquencies and repossessions are still well below recession-level rates. The bad news is both metrics should continue to rise as more subprime auto loans coming onto the books begin to deteriorate. But as lenders have indicated to Experian Automotive, today’s subprime buyer is less delinquent than those of the past. 

Lower interest rates are also working in the consumer’s favor, making vehicle payments more affordable. The 12.5 percent rise in leasing is also helping consumers ditch their aging vehicles. Overall, the auto finance market remains strong, which should continue to fuel vehicle sales as the auto industry continues down the comeback trail.

Rising Delinquencies Not a Concern

In the first quarter, 30-day auto-loan delinquencies rose from 2.33 percent in the year-ago period to 2.36 percent, while the 60-day delinquency rate increased from 0.57 percent in the first quarter of last year to 0.65 percent. Meanwhile, repossessions rose 16.9 percent from 0.43 percent in the opening quarter of 2012 to 0.5 percent this year.   

It’s never good to see delinquencies or repossessions trending upward, but they are still lower than recessionary levels. Thirty-day delinquencies in the first quarter of 2008, for instance, were at 2.61 percent, while 60-day delinquencies were at 0.67 percent. Additionally, the repossession rate is still well below the peak rate seen in first quarter of 2010, when it reached 0.71 percent. The first-quarter rate is also below the 0.57 prerecession rate recorded in the opening quarter of 2008. But those pre-recession numbers should serve as cautionary benchmarks for the industry.

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
Selling to Short-Term Owners

By Ronald J. Reahard
The magazine’s F&I pro responds to a question about how to build value in F&I protections if the customer says he plans on paying off his loan long before the term expires.

(Video) Selling High-Mileage VSC Plans

By Ronald J. Reahard
How do you sell a $3,000 VSC on an $8,000 car? Top trainer offers a four-step process to ensure every customer gets the protection they need.

Selling Warranty Compliance Plans

By Ronald J. Reahard

Handling the ‘Last Car’ Objection

By Ronald J. Reahard

Done Deal

Gregory Arroyo
Resolution Needed

By Gregory Arroyo
The editor shares some insider information regarding the industry’s efforts to get the Defense Department to reconsider last month’s interpretive rule regarding the sale of GAP and credit insurance to military consumers.

Rescinding the CFPB’s Auto Finance Guidance

By Gregory Arroyo
The editor debunks a few myths about the Consumer Financial Protection Bureau, then explains why the industry is on the brink of repealing the bureau’s auto finance guidance.

Still a Work in Progress

By Gregory Arroyo

It Is Unwise to Lower Your Defenses

By Gregory Arroyo

Mad Marv

Marv Eleazer
Chargeback Prevention

By Marv Eleazer
How do you respond to a customer who wants to cancel the F&I program you sold them? His Madness digs into four common reasons consumers give for wanting out of a protection plan.

Your F&I Backup Plan

By Marv Eleazer
Equipment failures can’t stop an F&I manager who is prepared for any contingency. His Madness lists four backup plans you can implement today.

Love It or Leave It

By Marv Eleazer


By Marv Eleazer

On the Point

Jim Ziegler
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
Da Man says $40,000-a-month sales rock stars still exist. He says you’ll find them on YouTube and Facebook Live.

The New Stooges

By Jim Ziegler

Is Your Quick Lube Driving Away Business?

By Jim Ziegler