F&I and Showroom, October 2016

www fi magazine com 10 F I and Showroom October 2016 DEVELOPMENTS Credit unions accounted for 25 of all auto originations in the first quarter of 2016 with the segment capturing 368 billion of the 147 billion in total originations during period according to CU Directs State of the Credit Union Auto Lending Market report In the past few years auto loans have become a larger part of credit union balance sheets the firm reported In the first quarter auto loans comprised about 337 of credit unions total outstanding loans Credit union auto origination continues to increase Q2 and Q3 of 2015 were the height of auto originations but going forward I believe that its not going to be at that high level but its going to continue to grow modestly said Jose Torres research analyst for CU Direct C ollectively credit unions on the CU Direct platform maintained their position as the third largest auto loan originator during the first half of 2016 They also realized the highest year overyear growth out of all other finance source segments Wells Fargo Dealer Services and Ally which held the No 1 and 2 spots in the first quarter posted a 52 improvement in originations and a 66 decline respectively Posting the largest declines in originations from a year ago were Santander Consumer Finance down 193 Ford Motor Credit down 171 and Nissan Infiniti Financial Services down 168 according to Experian Automotive An emphasis on leasing was the reason for the declines among captives Torres noted In the six months ending in June 549 of all newvehicle sales were financed and 315 were leased Since banks and credit unions largely deal with financing theyre able to benefit more from the current market dynamics Torres added Both new and used vehicle sales were up year to date according to the report The demand for trucks remained strong through the first six months of the year with 15 trucks sold for every car sold according to the report Newvehicle sales were up about 14 from a year ago while used sales were up 48 While the current trends bode well for credit unions its the growth in the used segment that will provide the biggest boost for the segment Torres said CU Direct Credit Unions Maintain No 3 Spot On Sept 14 the Federal Trade Commission FTC issued its second Federal Register Notice FRN on a proposed qualitative survey that would examine the consumer experience of buying and financing a car at a dealership It is also seeking clearance from the Office of Management and Budget to conduct the study Consumers who will be eligible for the study must have purchased a vehicle from a dealer in the previous six months used financing offered or arranged by the dealer kept the documentation they received as part of the purchase and financing and be located in the greater District of Columbia metropolitan area the agency noted The FTC has contracted Shugoll Research Inc a Washington D C based consumer research firm to locate participants for the study The proposed survey will begin with five in person consumer interviews that will test the survey questionnaire Once that initial group is interviewed 40 more in person interviews will be conducted The agency plans for half of the respondents to have prime or nearprime credit and the other half to have subprime credit ratings If the agency feels that additional interviews would be beneficial to the study it will interview 40 additional consumers Among other aspects the interviews will focus on the consumers experience in shopping for and choosing an automobile the process of agreeing to a price for the automobile the trade in process the process involving the sale of additional products and services the dealer offers the review and signing of paperwork and the consumers overall understanding of the documents presented The first FRN was issued on Dec 29 of last year The FTC noted that its second notice is similar to what was proposed last year however it added that the new FRN addressed some of the issues consumers and other groups raised with the previously issued FRN FTC SEEKING CLEARANCE TO STUDY DEALERSHIP EXPERIENCE