Asbury Automotive Group will finally acquire assets from luxury dealer group Park Place after an unsuccessful run at the deal in the first quarter, President and Chief Executive David Hult told Auto Finance News.
“Strong May and June performance, along with cost restructuring efforts, have driven higher profitability and cash flow, giving us conviction to move forward with a revised Park Place acquisition,” Hult said.
A boost in Lithia Motors’ used-vehicle sales is an indication the automotive industry is tracking a positive trajectory on the heels of the coronavirus economic crisis, and the franchise retailer has announced plans for an acquisition during the third quarter.
Lithia Motors jumped on a growth train in June, reporting a 23% upsurge in year-over-year used-vehicle sales up from an 8% YoY increase in May. Similarly, June same-store web traffic, by which the company measures unique visitor interest, skyrocketed over 50% YoY following up from a 40% YoY increase in traffic in May.
Despite the coronavirus pandemic, consumers still found time to grouse about their auto loans.
Complaints by consumers about auto lenders in June revealed the pandemic-spurred financial struggles and call center volume spikes, despite an overall dip in auto finance complaints during the month, according to the Consumer Financial Protection Bureau.
Leasing and financing app Rodo is swinging into July with a new partnership set to funnel an estimated 300,000 users to its platform. The deal comes on the heels of a notably profitable month of orders in June, Patrick McKeever, vice president of sales, told Auto Finance News.
Auto loan extensions are gravitating back toward pre-pandemic rates, dropping by an average of 55% in May for each of the seven auto asset-backed securitization shelves that reported updated figures, according to an S&P report. The seven shelves represent one-third of the auto ABS shelves’ S&P rates.
Investors should welcome the drops in extension rates, according to the rating agency, which have come months sooner than forecasts predicted. In early May, S&P expected extensions to run higher than normal into June and July.
While the automotive market is still tracking behind all prior-year sales metrics, franchise dealer sentiment is optimistic about the coming summer, according to a Cox Automotive report released today. Independent dealers, on the other hand, said their top priority is just keeping their showroom doors open.
German auto manufacturer Porsche AG has its eyes set on the expansion Porsche Drive, its short-term rental and vehicle subscription program package, a Porsche spokeswoman told Auto Finance News.
“After successfully expanding our vehicle subscription and rental programs, our key learning is there’s a market for shorter-term access to our vehicles,” said spokeswoman Jade Logan.
Subprime lender Nicholas Financial has ramped up its direct loan originations 150.3% year over year, according to the company’s earnings report for fiscal year 2020. Direct originations jumped to $12.6 million from $7.7 million in the prior year to follow through on previous direct loan growth trajectory goals.
The lender’s focus has recently been on marketing its direct loan product to current and former customer bases, according to Doug Marohn, president and chief executive of Nicholas. “The product is available to new customers too, but our efforts are focused on our core customer base,” he said.
Wholesale used-vehicle prices are on the rise, increasing 6.6% in the first 15 days of June compared with May, bumping Manheim’s mid-month used vehicle value index to 146.1. The index is forecast to hit an all-time high if the value holds through the rest of the month, according to Manheim’s mid-month index. Manheim first issued a mid-month index report in April as a response to the COVID-19 economic crisis.
Fraudulent auto loan applications have shot up $2 million per month since the beginning of the coronavirus pandemic, despite an overall decline in applications, according to PointPredictive.
“People are more desperate now than they’ve been in a long time,” said Frank McKenna, chief strategist at the risk management company. “They’re out of a job, dealerships are trying to sell cars because they’ve been locked down. In order to survive, there’s more desperation.”