NADA Headlines - 06/09/2017 (Plain Text Version)

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NADA Commends House Passage of CHOICE Act; Urges Timely Senate Action

Bill includes important CFPB reforms, repeals flawed auto financing guidance

The National Automobile Dealers Association (NADA) on Thursday praised the House of Representatives for passing H.R. 10, the Financial CHOICE Act, a comprehensive financial reform bill that includes significant and much-needed reforms to the Consumer Financial Protection Bureau (CFPB) and relief for consumers facing the prospect of higher costs for financing vehicle purchases.

The CHOICE Act, which passed the House by a 233-186 vote, includes a bipartisan provision that is virtually identical to H.R. 1737, an NADA-backed bill from the last Congress, which overwhelming passed the House by a vote of 332-96. This provision would nullify the CFPB's guidance on indirect auto financing, which attempted to eliminate a dealer's ability to discount credit in the showroom. H.R. 10 also requires the Bureau to: provide public notice and comment before issuing any additional auto-financing guidance; make publicly available all studies, data, methodologies or other information relied upon to produce the guidance; and study the costs and impacts of the guidance. The CHOICE Act also brings the CFPB under the regular congressional appropriations process for the first time, which is another reform NADA has long supported.

“Access to affordable credit is essential to customers and their dealers,” said NADA President and CEO Peter Welch. “Chairman Hensarling, members of the House Financial Services Committee, and the Members of Congress who supported H.R. 10 and worked to include these vital consumer protections should be commended for their efforts to keep auto financing affordable and available to consumers everywhere. I look forward to the Senate taking timely actions to help cement these consumer protections into law.”

“America's franchised new-car dealers have always been on the side of our customers, which is why we have so strenuously opposed the CFPB's anti-consumer guidance that would have raised the cost of car and truck loans, and pushed otherwise-creditworthy customers out of the auto credit market altogether,” said NADA Chairman Mark Scarpelli. “And we will continue to be on the side of our customers by urging Congress to get this legislation across the finish line, and by continuing to promote the voluntary NADA/NAMAD/AIADA Fair Credit Compliance Program that effectively manages fair-credit risk while preserving discounts on credit for consumers.”
Source: NADA

Subprime Auto Originations Fall to 10-Year Low

First-quarter vehicle registration data reveals that auto finance sources are moving toward more creditworthy car buyers, according to Experian Automotive. The shift pushed subprime auto originations to a 10-year low. And with the total share of subprime and deep-subprime loans to drop from 26.48% in the year-ago quarter to 24.1%, the 30-day delinquency rate fell to 1.96% from 2.1% in first quarter of 2016, according to Experian Automotive. “The truth is, lenders are making rational decisions based on shifts in the market,” the firm noted in its report. “When delinquencies started to go up, the lending industry shifted to more creditworthy customers.” With the shift, average credit scores for both new and used-vehicle loans rose from 712 in the year-ago period to 717 and from 645 to 652, respectively.
Source: Auto Dealer Monthly
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Car Dealer Knows What Customers Want; So Do They

Auto dealer Wes Lutz describes his customers as well-informed and purposeful. They often express an interest in advanced vehicle safety features, yet rarely in self-driving cars of tomorrow. “People are just not ready for autonomous cars,” says the owner of Extreme Dodge Chrysler Jeep Ram in Jackson, Mich., and the 2018 chairman-designate of the National Automobile Dealers Association. The auto industry may focus deeply on the autonomous-vehicle development, “but the industry is further out than the public is right now,” he says, pointing to customer indifference, at least for now.
Source: WardsAuto
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Wall Street Dials Back Auto-Sales View as Trump Bump Evaporates

So much for the Trump bump to the U.S. auto market. Analysts are lowering estimates for 2017 vehicle sales after five months of industrywide deliveries declining from a year earlier. Among the reasons: Carmakers are showing more restraint on discounts than expected and gridlock in Washington reduces the likelihood of a second-half surge. More than half of the analysts surveyed by Bloomberg News have reduced their full-year projections this spring, dialing the consensus back to 17.2 million light vehicles.
Source: Bloomberg
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NADA Launches New Digital Collection of Archives

As part of its 100th anniversary, the National Automobile Dealers Association (1917-2017) has partnered with the Hagley Museum and Library, a Smithsonian affiliate, to create a digital collection of historic publications, press releases, photographs, video and other collateral.

The NADA digital collection at Hagley began with a scanning project supported by NADA in 2014. Since then, Hagley has digitized and made available more than 2,600 publications and 600 videos.

The publications include periodicals and newsletters like AutoExec, NADA Magazine, Cars & Trucks and NADA Bulletin. Other documents in the collection comprise material related to the annual NADA convention, now known as the NADA Show.

Past NADA conventions make up much of the video material available in the archive. Material is also available for the American Truck Dealers (ATD) division of NADA.

The NADA archive offers access to a significant resource on the study of automobile culture in America, and provides a nuanced historical view of the thousands of dealerships that have played a vital role in local economies of small towns and big cities over the last century. To view the NADA collection, click here.
Source: Hagley/NADA [return to top]