NADA Headlines - 05/14/2013 (Plain Text Version)

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Has the CFPB Stepped Beyond its Charter?

Our mission is to make markets for consumer financial products and services work for Americans,” the Consumer Financial Protection Bureau says on its about page. A laudable goal, financial markets should work for consumers. But now the bureau has stepped past overseeing financial products, to overseeing the goods purchased with financial products. Following a bulletin on fair auto lending released March 21, the bureau issued subpoenas to U.S. auto lenders over the sale of extended warranties, according to the Wall Street Journal. The bureau shouldn’t be examining extended warranties at all. As an add-on product commonly financed within an auto-loan, extended warranties would seem a fitting next candidate for the bureau’s attention. Recently the bureau has been on a campaign against add-ons to financial products.

Early this year the CFPB completed rules to govern force placed insurance on mortgage loans. It also collected a $25 million penalty from Capital One Bank last year; the fine was for deceptive marketing tactics used to sell a payment-protection add-on product to credit cards. Extended warranties are not financial product themselves. They are a “vehicle service contract which covers the costs of some types of repairs in addition to or after the manufacturer’s warranty ends,” as the CFPB said on its website. Unless the Consumer Financial Protection Bureau is reconstituted as the “Consumer Protection Bureau” by Congress, probes into non-financial products should be left to other regulators like the state attorney general or Federal Trade Commission.
Source: CFPB Journal

Editorial: Tesla, A Budget Luxury

Amidst the electric car industry woes of taxpayer-backed Fisker, Vehicle Production Group and A123 Systems, Tesla Motors continues to be a bright spot. The company's electric Model S luxury sedan tied the 2007 Lexus 460L for the highest score ever recorded in Consumer Reports' auto test this year, scoring a 99 on a scale of 100. Tesla owes much of its success to talented, mercurial CEO billionaire Elon Musk who has a track record of bringing good products to market. Musk's success in private capital markets, however, begs the question of why the Obama administration has subsidized his venture to the tune of a cool half-a-billion dollars. In addition, wealthy buyers receive a "green" tax credit of $7,500 when they buy a $90,000 Tesla S. At a time when federal deficits are out of control, should Washington be spending tax dollars on chariots for the rich?
Source: The Detroit News [return to top]

NADA: Prices for Used Full-Size Pickup Trucks Up 7%

Auction prices for full-size pickup trucks are up nearly 7 percent through the first four months of 2013, says the NADA Used Car Guide in its May edition of Guidelines. “The recovery of home values and increased residential construction, stabilizing gasoline prices and a decline in late-model supply have resulted in higher trade-in values for full-size pickups,” said Jonathan Banks, executive automotive analyst with the NADA Used Car Guide. For example, the average trade-in value for a 3-year-old Chevrolet Silverado 1500 Crew Cab LT 5.3L 2WD is $20,540, up $1,460 or 8 percent, according to the May 2013 edition of the NADA Used Car Guide. Last year, the value of a 3-year-old Silverado was $19,080. The same trend can be seen across all brands of full-size pickups. “The low rate of depreciation for full-size pickups means that consumers will find themselves in a favorable equity position if they trade-in their used pickups for a new or newer pre-owned one,” Banks said.
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Chinese Creating New Auto Niche Within Detroit

Dozens of companies from China are putting down roots in Detroit, part of the country's steady push into the American auto industry. Chinese-owned companies are investing in American businesses and new vehicle technology, selling everything from seat belts to shock absorbers in retail stores, and hiring experienced engineers and designers in an effort to soak up the talent and expertise of domestic automakers and their suppliers. While starting with batteries and auto parts, the spread of Chinese business is expected to result eventually in the sale of Chinese cars in the United States.
Source: The New York Times [return to top]

Louisiana Auto Dealers Association Selects NADART as Preferred Retirement Plan Provider

The ranks of state dealer association clients continues to increase

The Louisiana Automobile Dealers Association has selected NADART as its preferred retirement plan administrator. “NADART has been my retirement plan provider for many years,” said Bob Israel, LADA president and chairman of the Automotive Trade Association Executives. “Their steady management practices have set the stage for many in our industry to enjoy a solid retirement.” Louisiana is the third state dealer association this year to select NADART following North Carolina and Oregon. “NADART is delighted to serve another state dealer association and its members,” said Betsy Piper Bach, NADART vice president and chief operating officer. “NADART is a leader in providing benefits with more than 55 years of experience in serving dealers.” For more information, visit
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