ARLINGTON, Va.--Industry executives discussed the climate of auto financing at the Consumer Bankers Association's Automobile Finance Conference last month. CBA reported that a main concern was how to address the controversy over finance charge disclosures.

"Our challenge is to demonstrate leadership in this issue," said Allan Starling, past chairman of the National Automobile Dealers Association. "Instead of more regulation, we have to help consumers understand how financing works. If we can do that, we can certainly increase customer satisfaction with the car buying process."

Gail Syfert, vice president of retail lending and manufacturer relations for Sonic Automotive, said another challenge is finding qualified F&I people. "We had to slow our acquisition pace to focus on training."

Another industry concern is negative equity and the growing number of upside-down loans. Early findings from CBA's 2004 Auto Finance Study showed that 45 percent of loans had terms over 60 months, up 6 percent from last year. Brent Fossey, senior vice president at Wells Fargo, said 84-month loans are becoming more common.

"We could see the loss per repo rise," said Gene Kirby, executive vice president and head of retail banking at SunTrust Banks. "Could this have the same impact as lease problems a few years ago? Maybe, maybe not, we'll see."

Despite these concerns, Kirby said auto finance "is a fundamentally sound business for those who stick to blocking and tackling. For those who take their eye off disciplines, you're headed for trouble."