In 2019, there was a reported $7 billion worth of fraudulent transactions in the auto finance industry. Desperation spurred by the pandemic in the second quarter has only exacerbated the issue, sparking an additional $2 million per month in fraudulent auto loan applications from the time the COVID-19 crisis began affecting the industry in March until mid-June.
Mazda Financial Services will launch a new bundled insurance product Aug. 1, President Pete Carey told Auto Finance News.
Customers can choose to wrap the new Mazda Protection Product services into the finance contract or purchase them separately from the dealership. The new product services include: vehicle service agreements, guaranteed asset protection, prepaid maintenance, tire and wheel, key replacement and excess wear and use. The service, however, will not include collision or liability insurance, Carey said.
Wholesale used-vehicle values have continued to outpace past reporting periods, evidenced by a spike to 155.9 in Manheim’s mid-July used-vehicle value index. The increase, which rose 6.3% from the first half of June, can be attributed to dwindling used retail and wholesale inventories, said Cox Automotive Chief Economist Jonathan Smoke in a quarterly conference call.
The index could hit record highs for the second consecutive month if this trend follows through the rest of July, according to Manheim. The mid-month index was first released in April when it recorded one of the largest falls since November 2008, plummeting 11.8% to 125.2.
Ally Financial forecasts its retail auto net charge-offs (NCO) to be between 1.8% and 2.1% of its portfolio by the end of its fiscal year, Chief Financial Officer Jennifer LaClair said in the company’s earnings call today. Along with shoring up its allowance for credit losses, the auto lender reported a strong second quarter with surging used-vehicle originations.
A squeeze in vehicle inventories could affect budding car sales across the U.S. following pandemic-spurred shutdowns, the Federal Reserve System (FRS) reported in the July edition of its Beige Book.
The FRS Beige Book tracks 12 different U.S. districts and categorizes them by cities with corresponding federal reserve banks in each region.
Auto repossessions are expected to surge above pre-pandemic levels as lender deferral programs begin to peter out in the coming months, said Cox Automotive Chief Economist Jonathan Smoke in a quarterly conference call. The agencies responsible for repossessing vehicles on behalf of lenders, however, may not be primed for the upsurge of defaulted accounts.
PNC Financial Services is ratcheting up its allowance for credit losses amid the industrywide trend of dwindling delinquency rates in the first half of 2020, the company announced in its earnings call today.
PNC bumped up its ACL on auto accounts by 60 basis points (bps) in the second quarter to 2.79% of total outstandings, which increased year over year to $16.2 billion from $15.6 billion.
This feature first appeared in the July issue of Auto Finance News, available now.
Three months into the spread of the global coronavirus pandemic, the auto industry has seen record changes across the board: new-vehicle sales plummeted in light of shelter-in-place orders and store closures, manufacturing ground to a halt, and used-vehicle values sank to a three-year low. And while the industry seems to be on the up-and-up as of July, executives nationwide are still trying to find a foothold to best manage the potential short- and long-term impacts of these unexpected developments.
The Auto Finance News team is pleased to announce that Tanya Sanders, head of retail underwriting and fulfillment at Wells Fargo Auto, will be the 2020 virtual Auto Finance Summit’s Women in Auto Finance keynote speaker, presenting “Crisis as a Catalyst for Change” on Tuesday, Oct. 20.
Sanders will share her journey as a female leader in the industry, highlighting personal anecdotes as well as the obstacles she has overcome during her 15 years in the finance sector.
BMW Group and Daimler AG have their sights set on the sustainability of the electric vehicle market, despite vehicle sales dwindling below year-over-year comparisons, according to company statements released this week.
BMW electric vehicles sales popped up 3.4% YoY to 61,652 units in the first half of the year. The automaker’s goal is to have 25 EV models on the roads by 2023, with more than half being fully electric vehicles rather than hybrids, according to a company release.