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May 20, 2013
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ON THE WEB: Demand Increases for Floor Plan ABS
City Puts Freeze on Store Expansion By Ed Fitzgerald
Solid asset performance and higher auto sales will likely increase demand for wholesale dealer lending and drive issuance of new U.S. dealer floor plan ABS, though the sector is not without potential potholes, according to Fitch Ratings in a new report. U.S. auto dealerships are in solid shape through the first quarter. Fitch’s outlook for asset and ratings performance remains stable in 2013. The agency rates 26 outstanding dealer floor plan ABS transactions
Creditor Expands into Nineteen States
Global Lending Services is actively purchasing automobile finance contracts in 19 states. Since the purchase of the assets and platform of Resurgent Auto Finance in August 2012, GLS has been focused on expanding its purchasing ability and geographic reach. When GLS purchased Resurgent assets, it was operating in four states.
A Detroit suburb is reworking an ordinance to stop the proliferation of used-car stores and at least one local dealer feels the city is also targeting existing lots. Warren Planning Director Ron Wuerth said the city has been swamped with requests for used car lots – receiving up to three requests weekly. “We had to issue a moratorium on the lots,” Wuerth said. “Each week the planning commission would get a couple requests, then the building division might get a request and then the zoning inspector would get a request.” Wuerth said the moratorium – originally six months long – expired April 16, but the city won’t be approving any new applications until scheduled hearings are held. He said the city currently has about 50 to 60 used-car stores. In 2008, the city had only eight lots. “And there’s another 20 people standing in line waiting to add to that number,” Wuerth said. The city’s current zoning ordinance prohibits a used car lot from operating within 700 feet of an-
TOO MUCH?: A dealership in Warren, Mich., attempts to draw shoppers. City officials claim too many used-car stores have moved into the area in the past few years.
other one, but he said that is often violated. Jeremy Smythe, who handles marketing for All American Auto Sales in Warren, feels his store is feeling the pinch unnecessarily. “The owner, David Kaczor, has been here almost 10 years and wants to expand,” he said. “But the city is not looking at it as an expansion. They want
us to rezone everything as one parcel.” He said the city wants All American to at least temporarily shut down, but is cutting them “some slack.” “Right now we are not supposed to look like we’re open for business,” Smythe said. “We can’t have a front line - our cars can’t be facing the road.” Smythe is somewhat sym-
pathetic to the city’s stance. “There are some lots on 8 Mile and Van Dyke that look like junkyards,” he said. “But we care about presentation and have done landscaping.” Smythe lays part of the blame on Warren Mayor James Fouts. “It’s really a case of one politician sticking to his guns,” Smythe said.
Rush - Dated Material
Chrysler Recalls Sport Utilities for Crash Risk Chrysler Group LLC is recalling 295,345 model year 2005-2010 Jeep Grand Cherokee vehicles manufactured Feb. 11, 2004, through March 9, 2010; and 2006-2010 Jeep Commander vehicles manufactured Jan. 31, 2005, through March 10, 2010. A transfer case electrical failure may result in an unintentional shifting of the transfer case into the neutral position. If the vehicle shifts into neutral, it may roll away increasing the risk of a crash or personal injury. The recall is expected to begin in June. Chrysler’s recall campaign number is N23.
Chrysler is also recalling 5,440 model year 2008-2012 Jeep Wrangler right-hand drive vehicles manufactured Feb. 1, 2007, through Oct. 10, 2011. The affected vehicles have airbag clockspring assemblies that could experience broken airbag circuits. In the event of a crash necessitating airbag deployment, a broken electrical circuit in the airbag clockspring wiring assembly can lead to non-deployment of the driver-side front airbag and will not be able to properly protect the driver, increasing the risk of injuries. The recall is expected to begin this month.
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