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Inside this issue
U.S. Chamber of Commerce Calls for Detailed Auto Lending Rules From the CFPB
Wells Fargo Sticks with Dealer Reserve
Auto Dealers Pay More, Keep Employees Longer
Sales Per Store Expected to Set Another Record
Repairing Today's Cars is a Costly Business
Collection Retains Slice of Auto History
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
U.S. Chamber of Commerce Calls for Detailed Auto Lending Rules From the CFPB

The U.S. Chamber of Commerce is pressing the Consumer Financial Protection Bureau to write what would amount to a compliance handbook for auto lenders. In a letter last week to CFPB Director Richard Cordray, the chamber called for the CFPB to provide auto lenders with specific rules for loans arranged at dealerships instead of forcing companies to interpret and apply guidelines tailored for individual lenders as part of "one-off" enforcement actions. "When the CFPB uses enforcement actions to send a signal to the broader regulated community, the message doesn't always get through in a way that's useful for a person sitting at a compliance desk," Jess Sharp, managing director of the U.S. Chamber's Center for Capital Markets Competitiveness, told Automotive News in a phone interview Tuesday.

The chamber's 16-page letter, dated Feb. 12, asked for, among other things, standards for disparate impact and liability in the context of indirect auto lending, a definition of "abusive" acts or practices the CFPB wants to eliminate, and a standard for lenders' liability for the actions of service providers, such as collection agencies or repo agents. The chamber has been a critic of the CFPB since 2010 when the bureau was created. In its letter, the chamber said the CFPB's present approach of "regulation by enforcement settlement" combined with issuing brief guidance statements makes it "virtually impossible for companies to determine in advance what they should do to comply with the law."

The chamber said that instead of using consent orders, such as the December 2013 consent order among Ally Financial, the CFPB and U.S. Department of Justice, as templates for compliance, the CFPB should follow a more formal rule-making procedure which would produce "detailed, practical guidance -- following public comment and meaningful economic analysis -- that both protects consumers and preserves access to credit and gives regulated businesses the clear, understandable standards they need to ensure that they are complying with the law."
Source: Automotive News
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Wells Fargo Sticks with Dealer Reserve

Wells Fargo, like other auto lenders, is sticking with dealer reserve. But it is also monitoring the Consumer Financial Protection Bureau's campaign to get lenders to switch to flat fees or some other form of dealership compensation in which stores don't have any discretion in setting their own compensation. San Francisco-based Wells Fargo's preferred-lender relationship with General Motors boosted the bank's new-car business in 2013, although bank executives said the overall loan mix at Wells Fargo is still around 70 percent used cars, 30 percent new. GM provides incentives for loans originated at its dealerships through Wells Fargo. The relationship started in 2011 as a pilot program on the West Coast and expanded to additional GM regions in 2012 and 2013. It has been nationwide since September 2013. In the fourth quarter, Wells Fargo auto-loan originations were $6.8 billion, a 26 percent increase from a year ago. Dawn Martin Harp, head of Wells Fargo Dealer Services, spoke with Automotive News Special Correspondence Jim Henry last month on the sideline of the National Automobile Dealers Association convention in New Orleans. Click here for a Q&A from the interview.
Source: Automotive News

Editor's note: To strengthen compliance with fair credit laws and protect the affordability and accessibility of auto credit, NADA has created a new optional program for dealers entitled the NADA Fair Credit Compliance Policy and Program. Dealers can download the information by going to www.nada.org/faircredit.
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Auto Dealers Pay More, Keep Employees Longer

Auto dealers experienced less employee turnover and hired more women and young people in 2012. Dealers also paid higher salaries, in line with increased productivity. Those are among some key findings detailed in the 2013 Dealership Workforce Industry Report released late last year by the National Automobile Dealers Association (NADA). This is the second annual workforce report. More than 2,240 car dealerships participated in the study. "This is by far the most comprehensive and timely study on the dealership workforce ever produced, and serves as a tremendous resource to help dealers 'step up their game' to gain an edge on the competition," a NADA official said. On average, salaries increased about 3.5 percent for the year with the increases slightly higher at luxury franchises than at non-luxury ones, said Ted Kraybill, president of Delta Trends, a research and consulting firm in Largo, Fla. Delta Trends designed and managed the study for NADA. The study—based on 2012 data—showed that total car dealership employee turnover in 2012 dropped 1 percentage point to 35 percent from the previous year. That is lower than the U.S. Bureau of Labor Statistics' estimate of employee turnover in the overall private sector of 41 percent.
Source: Automotive News

Editor's note: Enrollment is now open for the 2014 Dealership Workforce Study. Participating dealerships will receive two complimentary reports designed to improve recruiting and hiring decisions. Enrollment closes April 30, 2014. Dealers can enroll at www.nadaworkforcestudy.com. For more information, send an email to WorkforceStudy@nada.org or call (800) 557-6232.
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Sales Per Store Expected to Set Another Record

Average vehicle sales per dealership are on track to reach another all-time high this year, an automotive consultancy says. Urban Science estimates average sales per store, or throughput levels, will shatter the current all-time high, reaching what the firm calls “an astounding” 914 units, if 2014 light-vehicle sales reach a forecasted 16.15 million. That compares with 874 units in 2013 and 812 in 2012, both record years. The 22-year low point of 564 occurred in 2009, a dismal economic time, particularly for auto sales that went down hard. Despite the record-breaking of late, average sales per store ultimately will settle into “normal” levels of about 850, Urban Science says in its annual Automotive Franchise Activity Report.
Source: WardsAuto
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Repairing Today's Cars is a Costly Business

Changing technology might make car owners' driving experiences easier, but some auto repair shop owners' expenses have increased as quickly as they adapt the new equipment to their business. The days of lifting the hood of an ailing vehicle and snooping for a problem are gone. Now, auto repair shops are outfitted with scanners that diagnose problems in car engines, and they must buy expensive equipment to repair vehicles. “We have to stay on top on what is changing,” said Randy Harris, manager at J&J Auto Maintenance in Waldwick, N.J. “You either keep up or get left behind, but it costs you to keep up.” Repairs that used to be routine have become a full-blown computer exercise, Harris said. Cars that enter the market today use computer technology for anti-locking brakes, air bags, air conditioning, monitoring engine emissions and all of the entertainment or navigating systems found in modern vehicles.
Source: The Record (Hackensack, N.J.)
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Collection Retains Slice of Auto History

Mich. family boasts dozens of cars dating from 1920s-'70s

Tucked away in the backstreets of Frankfort, a picturesque harbor town in northwest Michigan, is an automotive gem with strong Motown connections. Three barns house a treasure trove of classic General Motors cars, vintage Ford models and other assorted brands. This collection of 50-plus cars belongs to Larry Hale and his family, who lived in Farmington Hills before moving up north. Larry's son, Jeff, manages the collection and works on restoring the cars, acquiring new models and related hobbies when he is not at his regular marketing job with a Traverse City publishing company. The Hale car collection is not normally open to the public, but the family does open the doors quite frequently for interested car clubs, and visitors are welcomed by arrangement. Jeff Hale, 52, describes the collection started by his father in the 1960s as an effort to preserve a slice of American automotive history, rather than a money-making investment.
Source: The Detroit News
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More Articles
 
Quotable
"Over the last five years, the dealership network has set a new normal pattern. Maintaining this very conservative rate has allowed the U.S. network to continue its impressive increase in sales per dealer, creating a healthy and right-sized retail structure that benefits the dealers and automakers."

    -- Urban Science Vice President John Frith, commenting on the prediction that average vehicle sales per dealership will reach another all-time high in 2014, WardsAuto, Feb. 20
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