Auto Credit Express Blog
June 30, 2008
Bad credit leads for car dealers
Not all bad credit lead providers are created equal. Most of the companies out there provide leads to all kinds of industries – from mortgage brokers to furniture stores. Many of them even re-sell their leads to other providers.
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June 30, 2008
Keeping track of your subprime lender changes
With many subprime lenders pulling out of indirect lending, new lenders have to be added to your subprime lender list. How are you, as a special finance manager, supposed to learn all these new lenders and keep track of all the new programs?
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June 26, 2008
LotProOnline offers additional features for one price dealers
One of the issues facing one price and only price dealers is the ability to override a traditional subprime auto software system so that a deal comparison gives their subprime managers the correct comparative vehicle gross profits. With the latest version of LotProOnline, these values are correct.
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June 25, 2008
Fitch Reports Pressures on U.S. Auto ABS Performance Mount
In a report containing mixed results, Fitch ratings finds that the subprime auto loan sector continues to be affected by the weak U.S. economy.
Auto Credit Express wants to keep you up to date
In an effort to keep our dealers up to date on the latest economic news as it relates to the subprime car market, Auto Credit Express would like our dealers to be aware of the latest Fitch press release:
NEW YORK–(BUSINESS WIRE)–The asset performance of U.S. auto loan asset-backed securities (ABS) continues to be highly pressured by weak economic and consumer fundamentals and a softer wholesale vehicle market, according to Fitch Ratings. Prime and subprime annualized net losses (ANL) were both mildly better in May versus April declining to 1.14% and 5.47%, respectively; however, loss rates remain materially higher than those recorded in 2007.
The slight decline in ANL during May primarily reflected seasonal patterns. On a year over year basis, prime ANL in May were 78% above loss rates recorded a year earlier and well above levels produced in 2006 and 2005. Subprime ANL in May stood at 40% above 2007 loss rates. While ANL in May were still below loss levels recorded in 2002-2004, 60+ day prime delinquencies increased from April indicating that losses will likely continue their climb higher in June.
Frequency of default is being driven by the slowing economy including a weaker job market, rising household costs such as higher food prices and record high energy prices, and sinking home values which has led to declines in the average net worth of U.S. consumers.
Loss severity is expected to remain elevated due to overall declining wholesale vehicle values, especially in the sport utility vehicles (SUV)/light truck segment. A rapid drop in demand for gas-guzzling SUVs and trucks has led to a 24% and 21% y-o-y decline in values for the large SUVs and large pickups through May, respectively (source: Manheim Consulting). The Manheim Used Vehicle Value Index has fallen 6.3% (seasonally adjusted) in 2008 through May, versus the same period in 2007. Furthermore, longer term loans (more than 60 months) and higher loan-to-values (LTV) are contributing to higher levels of loss severity.
While the ratings of prime auto ABS have exhibited stability in the past two months, Fitch has observed a number of prime transactions that are experiencing cumulative net loss rates which are above Fitch’s original transaction base case forecasts. As Fitch anticipated, the rate of transaction upgrades slowed in 2008 compared with 2007. Should losses continue to trend higher the ratings of certain subordinate bonds may come under pressure. However, senior ratings are expected to continue to show stability as enhancement continues to grow in most cases. Through May 2008, 13 tranches of auto ABS transactions were upgraded, versus 61 tranche upgrades issued during the same period in 2007.
Fitch’s prime 60+ days auto ABS delinquency index rose 5.6% in May over April to 0.57%. On a year-over-year (y-o-y) basis, delinquency rates in May were 21.3% above May 2007 levels, a slight improvement compared to the prior few months. Prime annualized net loss (ANL) rates dropped 17.4% versus April to 1.14%, reflecting seasonal improvement.
In the subprime sector, 60+ days delinquencies rose 11% to 3.06% in May versus April, and were 40% above levels seen in 2007. Subprime ANL in May dropped 23% versus April but were 36% above May 2007’s loss rate. As with the prime sector, subprime ANL in May were still significantly above levels recorded in the past three years. However, loss levels produced through May 2008 remain well below losses exhibited in 2002-2004.
Fitch’s rating definitions and the terms of use of such ratings are available on the agency’s public site, www.fitchratings.com.
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June 20, 2008
LotPro Subprime Selling System training for success
Once your new LotPro Subprime Selling System has been installed, it’s time for the experts at Auto Credit Express to begin the training that will result in the long term growth and profitability of your subprime department.
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June 18, 2008
LotPro Subprime Selling System is designed for success
The new LotPro Subprime Selling System from Auto Credit Express is designed for car dealerships whose goal is to achieve long term growth and profitability in subprime car sales.
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June 16, 2008
Track your deals more accurately with LotProOnline
Keeping track of your deals in the funding process is absolutely critical. LotProOnline enables special finance managers to isolate the deal packages in transit to keep track of them.
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June 13, 2008
Reuters University of Michigan Consumer Sentiment Index Drops to 56.7
The latest preliminary report from the University of Michigan survey shows another drop in consumer confidence.
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June 11, 2008
New LotProOnline feature ensures vehicle profit accuracy
A valuable feature of the new release of LotProOnline allows the special finance manager to adjust lender fees prior to running an inventory deal comparison for a more accurate profit picture in the compare deals report.