NADA Headlines - 08/26/2013 (Plain Text Version)

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NADA: Flat Fee Push Misguided

Consumer bureau's effort is 'major issue,' Westcott says

The National Automobile Dealers Association intends to "keep pounding" to persuade Congress and the Consumer Financial Protection Bureau that the bureau's campaign against dealer reserve could backfire and make auto loans more expensive and harder to get, the head of the association said. "The CFPB is probably the major issue" facing NADA, Chairman David Westcott said during an editorial board meeting at Automotive News headquarters in Detroit last week. The bureau is pressuring auto lenders to alter the indirect lending model practiced by dealerships. Dealerships' discretion in setting the customer's final interest rate is an issue for the bureau. As a remedy, the bureau suggested that lenders switch to paying dealerships flat fees for arranging loans instead of allowing them to add to the lenders' interest rate, called the buy rate, on the loan.

But NADA President Peter Welch told Automotive News that switching to flat fees would turn the indirect lending model on its head. "When a lender wants to increase its portfolio, what do they do? They lower the buy rate," Welch said. He said dealerships also cut dealer reserve to get more business. "Now if I'm a bank and I want to raise my portfolio, I'm going to increase my flat fee," he said. "You've taken a market that naturally, competitively, served to lower rates, and ... we think that now that's all upside down. Why would they want to take 17,000 price discounters out of the market?"
Source: Automotive News

Why Diesels are Gaining Momentum in Diesel-Hostile U.S.

Diesel vehicle sales could explode the next few years, hitting as much as 10% of new vehicle sales by 2018, according to an expert panel here. That's several times the current diesel sales pace, a huge jump for an engine that's heavier, costlier and noisier that gasoline engines, uses more-expensive fuel that's harder to find and smells bad. Are the experts sniffing that diesel fuel? Not really. There are sound reasons that diesel-power vehicles could catch on.
Source: USA Today

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NADA MarketValues App Now Available in Google Play

Download the app today and receive the first 30 days free

NADA MarketValues, a mobile app designed for dealers to make informed pricing decisions on used cars and light trucks at auction, is now available for Android devices on Google Play. “We're excited to build on our success with NADA MarketValues for iPhone and iPad by expanding the app to Android users,” said Mike Stanton, vice president and chief operating officer of the NADA Used Car Guide. The app, which was launched earlier this year, provides subscribers with unlimited lookups by VIN scan or by make and model. A continuous Internet connection is not required.
Source: NADAFrontPage.com [return to top]

Editorial: Repeal the Ethanol Mandate

Renewable Fuel Standard is broken, expensive and a threat to car engines

Few federal edicts are more senseless than the ethanol blending mandate, so we're happy to report some common sense in the EPA's latest policy review. For the first time, the EPA this month defied the powerful Big Ethanol lobby and proposed lowering the mandated consumption of the alternative fuel in America's gas supply in 2014. The 2007 Renewable Fuel Standard, signed by former President George W. Bush, mandated how many gallons must be produced, regardless of market demand.

Reality has never been a policy priority for this fuel standard, but the EPA is taking the logical, if unprecedented, step of reducing the amount of ethanol the oil industry must use, saying it “does not currently foresee a scenario in which the market could consume enough ethanol.” This is a welcome change, and we urge the EPA's congressional overseers to take the next step and repeal the mandate altogether. Ethanol policy was born as an idea to reduce U.S. dependence on foreign oil, but in truth it has mostly been a sop to the powerful farm lobby.
Source: The Detroit News [return to top]

China Signals Clampdown on Foreign Car Makers

Chinese officials said they are planning to revise rules on how cars are sold in the world's largest auto market amid state media complaints over pricing, a development that could give foreign auto companies less sway over dealerships. Citing recent state media reports accusing foreign car makers of pocketing outsize profits in China and increasing conflict between car makers and local dealers, China Ministry of Commerce spokesman Shen Danyang said on Friday that some revisions of current regulations were necessary.
Source: The Wall Street Journal [return to top]

102-Year-Old Man Buys New Ford F-150 Pickup

Floyd Pullin has been a customer since the 1920s

Floyd Pullin of Confluence, Pa., loves his Ford pickup trucks that he just bought another -- at 102 years of age. Pullen, who looks more spry than most eightysomethings, has been a Ford customer since the 1920s, Ford says. The new 2013 F-150 STX was Pullin's 16th new Ford. To celebrate one of its most loyal customers, a party was thrown at Pullin's local dealership, Thurby Riverside Ford in Confluence. A state senator, Rich Kasunic, came to note the occasion and Ford workers prepared a video for Pullin to mark the occasion. Now, the question is, when will he be back to buy his 17th Ford truck?
Source: USA Today [return to top]