March 2, 2015
ON THE WEB: Millenials Love Cars
Nearly a third of Millennials surveyed say they have “a love affair” with their vehicle, according to new research from AutoTrader.com. More than 60 percent of Millennials enjoy browsing the dealer’s lot, compared to 53 percent of Generation Xers and 49 percent of Baby Boomers.
Captives, Credit Unions Offer Lowest Auto Rates The lowest rates for auto financing came from captive finance companies (rates 35 percent below average) and credit unions (25 percent below average), according WalletHub. National banks (roughly average), and regional banks (40 percent above average) were more expensive.
CPO Sales Lead Market
Edmunds.com analysts reported that certified pre-owned sales hit an all-time high of 2.3 million, even though it was not a record year for used-car sales overall. CPO made up 20.8 percent of total used car sales at franchised dealerships.
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Dealer Going Strong at 90 Years Old By Jeffrey Bellant
TROY, Mich. – In 1947, a new car cost $1,300 and a gallon of gas was about 15 cents. Ferrari began production of street-legal automobiles that year with the 125 S, Saab produced its first car and the Volkswagen Beetle arrived in the United States. “But the most important thing that happened in 1947 is that, at age 22, Mr. (Maurice) Van Collie got his first dealer license,” said Ted Cooper, vice president of the Michigan Independent Automobile Dealers Association. What was billed as a meeting of the Michigan IADA Feb. 10 turned out to be a surprise birthday party honoring Van Collie, who turned 90 on Feb. 19 and marks his 58th year as a dealer in 2015. “We’ve done a lot of research,” Cooper said, “and we looked all over the country at every association in the nation. “We found out that Mr. Van is the oldest active car dealer in the country.” Continued on page 10
Photo by Jeffrey Bellant HAVING HIS CAKE...: Dealer Maurice Van Collie celebrates his 90th birthday with his fellow members of the Michigan Independent Automobile Dealers Association.
Data Shows Subprime Finance Helps Consumer Credit Scores Equifax Inc. recnetly looked at two groups of consumers with deep subprime credit scores, (those with Equifax Risk Scores below 550), over a three-year period: those who originated a subprime auto loan and those who did not. Equifax found that over the three-year time period, those consumers with deep subprime credit scores that originated a subprime auto loan showed, in aggregate, a significant increase in their credit score. In fact, those consumers improved their credit score by a median of 52 points, which is a 62.5 percent improvement over the median score change of the group that did not take out a loan.
Those that took out a subprime auto loan were four times more likely than those who did not to improve their score to a level above 640, moving them out of the subprime segment. “The auto industry’s success wouldn’t be what it is today if it weren’t for the responsible, solid subprime loans made to the many Americans in need of a car to get to their jobs or take their children to school,” said Equifax chief economist Amy Crews-Cutt. “Lenders now have better tools, more data and enhanced technology available to them to make sounder and safer decisions.”
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