Has anyone encountered any problem with Chrysler dealerships closed down by the manufacturer? I have heard some stores of some credit unions with title issues and other paperwork issues.

Have you noticed your dealerships increasing the sale of Security Guard (or other theft protection packages)? Well I have and did a little bit of investigating. Apparently finance people are told by the sales reps to tell customers that the product is already on the car (i.e. a few stickers) and all they have to do is buy it for a small price to activate it and they have to “extra” protection. Basically if the car is stolen your primary insurance covers the car, then anything left over is taken car of by gap (which is usually required if you buy Security Guard) then anything left over after that is taken care of by this product. It cost the dealerships 75 bucks. They turn around and sell if for anywhere from 100 - 1,000 dollars. What experience have you had about this hard add aftermarket?

Sales are down amoung all car manufactures in April. The lowest is Subaru at -6% and the highest is Suzuki at -73%. So you see a correlation with these numbers to your new car loan volume?

Brand Volume
Ford -29.96%
Chevrolet -26.71%
Toyota -42.19%
Honda -24.51%
Dodge -48.24%
Nissan -36.28%
Hyundai -13.56%
Kia -14.83%
GMC -35.75%
Jeep -41.69%
Volkswagen -16.10%
Mazda -32.07%
BMW -41.26%
Subaru -6.69%
Mercedes-Benz -28.15%
Lexus -39.21%
Chrysler -54.76%
Pontiac -54.86%
Buick -29.51%
Acura -32.34%
Cadillac -41.94%
Mercury -40.65%
Saturn -56.38%
Audi -9.31%
Lincoln -42.23%
Infiniti -48.29%
Volvo -36.92%
Mitsubishi -55.86%
Mini -22.41%
Suzuki -73.70%
Porsche -35.28%
Hummer -61.64%
Saab -43.54%

Auto loan delinquency is on the rise. By the end of 2008 there were more than 7 billion in auto loans 60 days or more past due. It is up 1.04% in the US and on the rise across the board among all finance operations. From Captives, banks, finance companies, and credit unions. Overall auto loan delinquency at credit unions went up from 0.45% to 0.57% in 2008. How is your credit union handling the rise in late payments? Have you employed any new tatics?

It all started with Hyundai and now it seems every auto manufacture finance wing is offering some type of job loss payment protection. Mostly for new automobiles, but some are now offering it on certified used cars too. It is basically nothing more that an insurance policy that most manufactures offered before the recession. Does your credit union offer any type of job loss insurance policy? If you did, do you think your credit union would increase loan volume?

It is expected that many new laws will hit the books this year from congress. Here are some of the major ones that could effect your dealerships.

The first rule is a cap on interest rates and fees imposed by dealerships. In July, US Sen. Dick Durbin (D.Ill.) introduced a bill called Protecting Consumers from Unreasonable Credit Rates Act (S. 3287). It would set a federal usury cap on annual percentage rates. THe bill never made it out of the House Banking Committee, however it is expected to make it this year.

Other new laws included are a rule putting a maximum limit on what a dealership can charge for prep free when delivering a car, stopping spot deals, additional disclosures on used cars, and finally making electronic titles standard.

In the past few months a record number of New car dealerships have closed their doors. But have they? In my area a number of new car dealerships, mostly those selling GM and Chrysler brands have discontinued selling new cars. They are however are changing their names and selling used cars only. In some cases it was the manufacturer trying to consolidate in other cases its the dealerships running though cash reserves and the manufacturer closing them down. What steps do you take if one of your new car dealers becomes a used car only operation??? I make them provide 2 years of tax returns and require the title to be perfected before we fund the loan. Any other suggestions?

In these hard times many dealerships are inflating the value of their automobiles by telling the banks they have options that do not exsist. Have you ever come accross a dealer that does this? How did stop it? In my office we always check for the cars on the dealerships website, especially when they tell us the car has an option that is unusal. For example, a Chevy Cavalier with leather seats and a moonroof. We also spot call members after the deal is done to verify the car does have those options.

DealerTrack, inc. offers econtracting for the funding of loan contracts. The dealer can send all the documents and signatures to the finance company electronically and cut down on the wait time to be funded. Does anyone currently use econtracting? All the information I have seen (pros and cons) are all from the delaerships perspective. Any credit unions out there want to share their experiences?

General Motors is partnering with the Michigan Credit Union League to offer lower interest rates on car loans through their 1,200 + credit union according to The Detroit News.

The program is being called “Invest in America.” The program would make 10 billion in auto loans available to credit union car buyers through their Michigan credit union. GM would also give further cuts on the MSRP of the vehicles.

GM hopes to expand it nationally. What are your thoughts? It seems like it could only further the bond with indirect lending. Not just with the credit union with the dealer, but now with the credit union, dealer, and manufacturer.