Automotive News Finance & Insurance Blogs

When a client dies, lender can make or break trust

Posted 11:00 am U.S. ET, Feb. 10
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
A consumer’s death during his or her lease term isn’t a common occurrence, but how the lender responds to the needs of the consumer’s family members makes a lasting impression. Automotive News became interested in learning about programs for deceased lessees after we heard about a captive that required the lease customer’s widow to pay off her husband’s payments -- n ...
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F&I product add positions Cox for growth

Posted 11:45 am U.S. ET, Feb. 3
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
F&I product sales could be the key to dealership profit, and by offering F&I products to its dealers, Cox Automotive is setting itself up for growth. Cox Automotive announced last week that it acquired a minority interest in F&I product provider SilverRock Holdings. Dealers who work with Cox Automotive’s NextGear Capital and GO Financial will be able to offer customers F&I p ...
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Beware the pitfalls of digital ads

Posted 11:45 am U.S. ET, Jan. 27
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
To steer clear of illegal advertisements, dealers should be mindful of the pitfalls lurking in the digital space. There has been an industrywide push to put much of the car buying and financing process online, including advertisements. While that’s a good thing for consumers and auto retailers alike, dealers should make sure that online ads don’t come back to haunt them. State attorn ...
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Efficiency, compliance still trump shorter visits to F&I office

Posted 12:30 pm U.S. ET, Jan. 20
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
Speed in the F&I office, while a priority, may not be dealerships’ No. 1 goal anymore. A quick visit to the F&I office makes a difference, especially in pleasing those consumers who expect immediate gratification. But ease and transparency in the process seem to take precedent for retailers. When I leased my car in September, the transaction from start to finish took about three ho ...
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With a whiff, Ally aims to stand out

Posted 11:00 am U.S. ET, Jan. 13
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(HANNAH LUTZ)
HANNAH LUTZ:  What’s your car scent? A blend of cappuccino, hairspray, lipstick and yoga mat? Or is it a mix of bonfire, axle grease, flannel and beard? Or maybe it’s a combination of baby wipes, stain remover, crayon and a little bit of regret. Ally Financial will tell you. Ally is featuring a “New Car Smell” exhibit Jan. 11-24 at the North American International Auto Show at Cobo ...
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What I've learned on the F&I beat

Posted 11:00 am U.S. ET, Jan. 6
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
It’s been nearly eight months since I became the F&I reporter for Automotive News. In that time, I’ve learned, sometimes by trial and error, the intricacies of F&I. I’ve learned that the auto finance industry is becoming savvier with technology, more careful in lending and more privy to consumers’ preferences. I’m still, as F&I pros would say, a green pea ...
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2016 will bring more compliance chatter

Posted 10:30 am U.S. ET, Dec. 30 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
Are you sick of the word compliance yet? It was the center of industry conferences, company strategies and news stories this year. And while compliance is a tired word, it will likely continue to be a pillar of auto finance in 2016 and beyond. News about the Consumer Financial Protection Bureau’s actions against auto lenders dominated Automotive News’ list of the best-read F&I stor ...
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Is F&I disruptor's plan worth the risk?

Posted 12:01 am U.S. ET, Dec. 23 2015
blogs Hannah Lutz covers finance and insurance for Automotive News
 
Dealer-owned captive financing sounds like a promising idea for retailers, but is it worth the risk? Erik Day, CFO and partner at Warren Henry Automotive Group in Miami, is gunning for it. His plan earned him a spot among a dozen auto industry disruptors profiled this week by Automotive News staff reporter Lindsay Chappell. ERIK DAY PROFILE: Bringing F&I in-house Warren Henry and other ...
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Study finds women are savvy car-lease negotiators

Posted 12:00 pm U.S. ET, Dec. 16 2015
blogs Hannah Lutz covers finance and insurance for Automotive News
 
The image of the dealership as male territory is no longer true, and it was debunked once again. Women are savvy car shoppers and capable buyers. Anecdotally, I’ve heard women recall dealership personnel asking whether they wanted to wait for their husbands before purchasing a vehicle. Or passersby asking women in a luxury vehicle if it were her husband’s car or commenting that her h ...
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Keep holiday ads plain, clear

Posted 12:00 pm U.S. ET, Dec. 9 2015
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HANNAH LUTZ:  To draw in customers, make holiday ads crystal clear. Automakers, hoping for a strong finish to what is shaping up to be a record year for the industry, are competing for every sale with holiday incentives. And, to be competitive in the holiday car-shopping game, ads should be plain and clear. Customers should be able understand what the offer is just from reading the bold print, such as “ ...
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Credit data changes spur loan growth

Posted 12:45 pm U.S. ET, Dec. 2 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
Editor's note: An earlier version of this story misidentified the origin  of the credit model used before 2000 by Fannie Mae and Freddie Mac. The model came from FICO. The rising number of auto loans could in part be a result of changing credit scoring methodologies and the use of alternative data. Credit bureau data consistently show that auto loan balances and originations are growing. Ex ...
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Why CFPB reform bill could face tougher challenge in the Senate

Posted 11:00 am U.S. ET, Nov. 25 2015
blogs Hannah Lutz covers finance and insurance for <i>Automotive News</i>.
 
A bill to limit the Consumer Financial Protection Bureau’s 2013 auto lending guidance has had overwhelming support so far, but when it reaches the Senate, the story could change. Last week the bill easily passed in the House of Representatives with a vote of 332-96, after moving through the House Financial Services Committee in July. But the bill, called the Reforming CFPB Indirect Auto Fi ...
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A case for tracking customers' ownership status

Posted 11:45 am U.S. ET, Nov. 18 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
Service contract sales could be the key to keeping customers driving the oldest vehicles engaged with their dealerships. By 2020, there will be about 76 million vehicles on the road that are 16 years old or older, up from 35 million in 2002, marking a “sweet spot” for the aftermarket repair business, IHS said this month. That spells opportunity for dealerships that track customers&rs ...
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Accuracy, time savings drive e-contracting gains

Posted 12:00 pm U.S. ET, Nov. 11 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
Auto retailers and lenders are realizing more and more the value of electronic contracting. It’s not just the processing speed of e-contracts that’s appealing, it’s also the accuracy. And that can be a compliance safeguard. When an F&I manager makes a data-entry error on an e-contract, the software prevents the manager from submitting the faulty document to lenders. When the ...
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Why F&I manager turnover is high

Posted 12:15 pm U.S. ET, Nov. 4 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
The latest NADA workforce study again found that F&I managers are making more money than any other employees at dealerships save general managers. So it surprised me when the study showed that the median length of time F&I managers stay on the job is three years. That’s the shortest amount of time for manager positions. Of the nine dealership positions covered in the 2015 study, re ...
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Industry fine-tunes credit measures to avoid subprime risk

Posted 1:30 pm U.S. ET, Oct. 28 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
The idea of a subprime auto loan bubble still hasn’t popped with everyone. Thomas Curry, comptroller of the currency, made that clear last week in remarks to the Exchequer Club, a group of professionals from trade associations, federal regulatory agencies, law firms, congressional committees and the national press in Washington. Curry, echoing other finance industry watchers, said the stat ...
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It’s time to look beyond car buyers’ credit scores

Posted 11:30 am U.S. ET, Oct. 21 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
Consumers that have the ability to keep up with loan payments may still be turned down for financing on the car they want. Some are stuck in a rut because of limited credit history or a negative event that hurt their score. But for some consumers, payment history can show they are more prepared to take on loans than their credit scores would indicate. This new path to determine creditworthiness ...
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Warding off bias claims by shedding light on dealer reserve

Posted 12:15 pm U.S. ET, Oct. 14 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
Of the three parties that share a financial stake in an auto loan arranged at a dealership, typically only two know exactly how the interest rate breaks down: the dealership and the lender. Most car buyers are in the dark when it comes to the bit of interest that the dealership likely has added to their loan, known as the dealer reserve. Lenders allow dealerships to add interest to auto loans as ...
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Different challenges, but these 2 finance companies move forward

Posted 11:45 am U.S. ET, Oct. 7 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
GM Financial is rising strongly. Meanwhile, Ally Financial is still standing despite its shattered ties to General Motors. GM President Dan Ammann said he expects GM Financial’s profit to more than double in the next three years, soaring to as high as $2 billion annually. Last week, Ammann called the captive arm’s rebuild “an absolute home run.” GM Financial’s growt ...
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Before CFPB crackdown, how about some guidance?

Posted 12:00 pm U.S. ET, Sept. 30 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
Before the Consumer Financial Protection Bureau cracks down on auto lenders, it should offer guidance on what its dealer reserve standards are. The American Honda Finance Corp. settlement and recent Fifth Third Bancorp settlement with the CFPB and U.S. Department of Justice have the same dealer reserve limitations: a cap of 1.25 percent for loans lasting 60 months or fewer and 1 percent for loan ...
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A cautionary tale of 2 dealership groups and compliance

Posted 1:15 pm U.S. ET, Sept. 23 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
Here’s a cautionary tale. Just two years after the Federal Trade Commission charged them with deceptive advertising, two dealership groups caught fire again. And it’s costing them. The groups are Billion Auto, which has 20 family-owned dealerships in Iowa, Montana and South Dakota, and Ramey Motors Inc., which operates seven dealerships in West Virginia and Virginia. The FTC sued th ...
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Is more schooling needed on CFPB?

Posted 12:15 pm U.S. ET, Sept. 16 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
Is the Consumer Financial Protection Bureau the household name everybody assumes it is? At the Industry Summit last week, several presentations on the CFPB seemed to cover old ground, essentially introducing the agency as if the audience didn’t know what it was. Unnecessary? Maybe not. At Northwood University this month, EFG President John Pappanastos gave students participating in the EFG ...
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Affordability, technology are hot F&I product topics among student inventors

Posted 11:45 am U.S. ET, Sept. 9 2015
blogs Hannah Lutz covers finance and insurance for Automotive News.
 
MIDLAND, Mich. -- Students at Northwood University view the school’s first annual competition to invent a salable F&I product as a gamelike challenge to make the F&I experience better for dealerships and customers alike. “This project is a giant puzzle of how can I make stores better? How can I make people’s lives better?” student Tyler Scott said. There is no set ...
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Will Gen Y push leasing sea change?

Posted 11:45 am U.S. ET, Sept. 2 2015
blogs
 
When millennials are itching to get into a brand new car, many look to leasing. Leasing made up 28.9 percent of new vehicles purchased by millennials in July, compared with 26.7 percent for buyers industrywide, according to Edmunds.com. Over the past five years, new-car leasing among millennials has surged 46 percent vs. 42 percent among all car buyers, Edmunds notes. Leasing obviously appeals ...
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E-contracting needs standard definition

Posted 12:15 pm U.S. ET, Aug. 26 2015
blogs Hannah Lutz is a staff reporter covering finance and insurance for Automotive News.
 
Although electronic contracting has gained traction, it’s still not widely embraced by dealers. Why? Confusion is standing in the way. Companies define e-contracting differently. It won’t be desired or embraced until the industry develops a standard definition. To get dealers on board, the industry needs to use the same dictionary. There has to be a “common language” wh ...
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