F&I and Showroom, October 2019

www fi magazine com 10 F I and Showroom October 2019 DEVELOPMENTS SAAR FAILS TO CRACK 17M IN AUGUST T he seasonally adjusted annualized rate of U S new vehicle sales is projected to have climbed no higher than 168 million in August a 12 yearover year decline But 28 selling days including Labor Day weekend helped several manufacturers deliver record volumes in the latest monthly sales report compiled by Automotive News The holiday weekend was credited to September on last years sales calendar which gave August 27 selling days and four weekends pushing the SAAR to a hair over 17 million Honda Toyota and Subaru each reported their best U S sales month ever led by Honda with 173993 deliveries a 176 year over year improvement SUBPRIME GETS LOWEST SHARE SINCE 2011 E quifax analysts say fewer subprime loans for greater amounts drove the categorys share of the U S auto finance market down to 227 a 17 decrease while subprimes share of all outstanding balances held at 183 The bureau reported 796 million auto loans totaling 1839 billion originated from January to April a 03 decrease in accounts and a 23 increase in balances over the first four months of 2018 Of those 181 million originations went to consumers with a VantageScore 30 below 620 a 18 decrease These newly issued loans have a corresponding total balance of 336 billion a 18 increase FINANCE COSTS DRIVE 24 SPIKE IN TCO F inance costs on new car purchases have jumped 24 in 2019 according to new AAA research pushing the average annual cost of vehicle ownership to 9282 or 77350 a month Thats the highest cost associated with new vehicle ownership since AAA began tracking expenses in 1950 and a reminder that the true costs of owning a vehicle extend far beyond maintenance and fuel Depreciation remains the single biggest cost accounting for 36 of the average annual expenditure The spike in finance charges which rose from 744 to 920 a nearly 200 increase was fueled by rising interest rates and higher prices SALESMAN PLEADS GUILTY TO 3M FRAUD A former Porsche salesman has pled guilty to operating a 3 million fraud scheme in which he entered into bogus sales orders for the sale of exotic models to at least 30 U S customers Shiraaz Sookralli was a longtime employee of Pompano Beach Fla s Champion Porsche when he perpetrated the fraud He made national news for evading authorities from the time the lawsuit was filed last September to his arrest in April Sookralli was charged with conspiracy to commit mail and wire fraud He will be sentenced on Nov 14 and could spend up to 20 years in federal prison EEOC SUES TWO DEALERS FOR GENDER BIAS T he U S Equal Opportunity Employment Commission filed lawsuits against two auto dealers for gender discrimination last month Champion Chevrolet in Reno Nev was accused of violating federal law by denying opportunities to a female salesperson and creating a workplace environment so hostile she was forced to quit just over six months after her hire The second Landers Chrysler Dodge Jeep Ram of Norman Okla was accused of failing to retain the only female sales consultant under the dealerships previous ownership At the time a Landers executive allegedly told another manager This is not a ladys job yet according to the EEOC DEALER SUES FORMER GM F I MANAGER T he owner of a Mitsubishi dealership in Charleston S C has filed a lawsuit in federal court against his former general manager and F I manager Hoover Mitsubishi has been shuttered since a June FBI raid Criminal charges against the business its former GM Shawn Rustin and former F I manager Kentrell Davis have yet to be filed In his lawsuit Mark Hoover owner of the dealerships parent company CarFare Charleston LLC claims Rustin and Davis conspired to falsify an unknown or undisclosed number of auto loan applications with nonexistent trade ins and down payments inflated incomes and fake utility bills N ational Automobile Dealers Association officials are on the record in opposition to proposed revisions to the federal Safeguards Rule The new guidelines were offered by the Federal Trade Commission as a mechanism to enforce existing data privacy standards as new technologies and applications proliferate NADA says they would represent an undue financial burden to auto dealers and could derail compliance efforts In effect since 2003 the rule affects financial institutions including dealers whose activities include facilitating the financing and leasing of vehicles It requires business owners to designate a compliance officer identify risks and design appropriate safeguards conduct risk assessments on software and oversee service providers and periodically review their programs In addition to adding businesses engaged in activities incidental to financial activities to its scope of enforcement the governments proposed changes would include provisions designed to provide more guidance and improve accountability related to those efforts NADA MOUNTS OPPOSITION TO ENHANCED SAFEGUARDS RULE NADA was among the entities that submitted official comments to Regulation gov in response to potentially costly additions to the federal Safeguards Rule PHOTO BY ABERRO CREATIVE VIA PIXABAY