The auto finance industry continued to quell the subprime bubble talk, with finance sources extending credit to five times more superprime car buyers than deep subprime shoppers.
Asbury increased its F&I per-copy average 3% to $1,436 in the second quarter. But total F&I gross profit fell due to a 'Choppy' retail environment, officials said.
During Ally Financial's second quarter earnings call, company officials said the finance source is moving downstream into the higher risk, higher yield credit tiers and focusing less on the low-risk superprime loans.
Poor retail sales were offset by a 3.1% increase in total F&I gross profit and a 40.5% increase in revenue at Sonic Automotive's EchoPark locations. While declining oil prices have hurt the company's performance in the Houston market, officials are confident the group will recover.
Despite a competitive subprime auto finance environment, GM Financial continued gravitating toward a more prime-like credit profile during the second quarter.
Wells Fargo reported second quarter auto originations of $8.3 billion, a 7% gain from the first quarter of the year and a 2% gain from the year prior. Bank officials, however, reported higher delinquencies and net charge-offs.
The total dollar amount of automotive loan balances outstanding hit $839.1 billion in the second quarter of 2014, up 11.7% from the previous year. Officials said the industry should watch this trend closely, as it may dictate the availability of credit in the future.
The auto finance source also recorded record used-vehicle originations and grew its dealer network by more than 900 dealers in the second quarter.
AutoNation reported during its second-quarter investor call that it has installed the NADA’s Fair Credit Compliance Program in nine stores. Officials also provided an update on the company’s digital push.
Dealertrack updated its 2013 guidance to reflect strong second quarter performance and 26 percent year-over-year revenue growth.