March 16, 2015
ON THE WEB: DriveTime Offers Lease Cancellations
DriveTime has introduced its Cancel Anytime Lease program across 126 dealerships nationwide. The used-car lease option allows consumers to lease a vehicle with a down payment under $1,000 and provides the ability to return the car at any time and cancel the 30-month lease agreement without negatively affecting the consumer’s credit score or incurring financial penalties.
Independent Auctions Set to Sponsor IARA
The Independent Auction Group announced that a fouryear sponsorship agreement was initiated between IAG and the International Automotive Remarketers Alliance.
Salespeople Matter More Than Media
Social media channels do not provide significant information to new car buyers, according to MaritzCX. Consumers ranked the dealer salesperson as the most important source.
Rush - Dated Material
www.usedcarnews.com
SEE OUR AD ON PAGE 17
Subprime Finance Continues to Grow By Jeffrey Bellant & Ted Craig
More consumers are financing cars than ever before. Consumers financed 55.2 percent of all used-car purchases in the fourth quarter, according to Experian. The average credit score for a used vehicle financed increased 2 points in the quarter to reach 648. That seems to offset some of the concerns about a growing subprime bubble. Melinda Zabritski, Experian’s senior director of automotive finance, said more subprime consumers are financing cars, but that’s because of the overall growth in financing. “We still see subprime as being very stable,” Zabritski said. Some subprime firms are going deeper into the credit pool and taking sales from buy-here, pay-here dealers, she said. The competition comes mainly at top end of the deep subprime range; mostly consumers with credit scores between 480 and 520. Much of this competition is coming from new finance
Photo by Ted Craig BIGGER, NOT BUBBLY: Melinda Zabritski, Experian’s senior director of automotive finance,
shares her views on the state of automotive finance. companies entering the market. Dealer Henry Mullinax, president of Mullinax Auto Sales in Anniston, Ala., wor-
ries that this competition can cause bad behavior. Some independents have difficulty competing with deep subprime lenders,
Mullinax said, so they get in over their heads and cut corners to survive. It even affects reconditioning.
ADESA, ServNet Exit Multi-Platform Selling Initiative By Jeffrey Bellant & Ted Craig
Multi-platform selling, heralded as the next major step forward for the auction industry, has suddenly fallen apart as major players withdraw from the proposed system. MPS involves taking vehicles and putting them online simultaneously, across multiple platforms. ADESA was the first to pull out of the industry-wide plan to create such a system. “After lengthy and protracted efforts to create an MPS, our industry partners have been unable to agree on the best
way to execute this solution,” said Peter Kelly, president of the company’s Digital Services Group. Kelly said the proposed MPS as currently structured would subject market participants to heightened technology requirements and expenditures. ADESA also believes the proposed MPS structure and its associated economic and governance model poses antitrust risks by raising new barriers to entry for smaller industry players, reducing competition among the auctions and increasing costs for sellers, buyers and ultimately retail consumers. ServNet followed ADESA in abandoning the project. Continued on page 12
WORK WITH AN
INDUSTRY LEADER
01_UCN.indd 1
nextgearcapital.com
3/9/15 4:58 PM