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The Federal Reserve Bank's recent rate increases to curb inflation have quickly cascaded to the retail US auto industry. In fact, as shown below, average loan rates began climbing before the prime rate moved up. Back in January, the average loan rate increased .2 PP month-over-month to 4.3%, and it has been rising ever since, reaching 5.6% in July. Also, the concurrent increases in the prime rate and the average auto loan rate should not be surprising: the correlation coefficient between the two metrics is a very strong .95.
However, these rate increases have varied depending on the buyer's credit standing. While the most credit-worthy customers (781 - 850) have seen rates more than double from May 2020 to 4.4% this past August, households with the lowest credit scores (300-600) have actually seen a .1 PP rate decline to 10.6%. This lower tier of customers, though, still are paying a rate more than double that of the top tier.

DETROIT — All summer long, Aleen Hudson kept looking for a new minivan or SUV for her growing passenger shuttle service.

She had a good credit rating and enough cash for a down payment. Yet dealerships in the Detroit area didn't have any suitable vehicles. Or they'd demand she pay $3,000 to $6,000 above the sticker price. Months of frustration left her despondent.

“I was depressed,” Hudson said. "I was angry, too.”

A breakthrough arrived in late September, when a dealer called about a 2022 Chrysler Pacifica. At $41,000, it was hardly a bargain. And it wasn’t quite what Hudson wanted. Yet the dealer was asking only slightly above sticker price, and Hudson felt in no position to walk away. She's back in business with her own van.

Ignite Consulting Partners continued its Tip of the Week series by again focusing on the enhanced Safeguards Rule set to be implemented by the Federal Trade Commission.

Ignite said that independent and buy-here, pay-here dealerships should have completed or at least are in the process of compiling their risk assessments and formulated a report mandated by the FTC.

The firm said that these reports should contain details based on your investigation about events where the FTC says pose a foreseeable risk “to the security, confidentiality, and integrity of customer information.”

After back-to-back monthly gains, US consumer confidence declined in October by more than expected as uncertainty around the Federal Reserve's interest rate hikes and persistent, high inflation continue to drag on Americans, according to the latest report from the Conference Board.

The Conference Board's Consumer Confidence Index slumped from 107.8 to 102.5 from the previous month. Bloomberg economists had forecasted a smaller dip to 105.9.

The largest U.S. banks are warning of trouble ahead in auto loans as dropping prices for used vehicles risk leaving borrowers underwater.

Wells Fargo & Co. said that higher loss rates for loans it originated late last year contributed to an increase in write-offs for the period. Ally Financial Inc., the country’s second-largest auto lender, saw charge-offs for retail auto loans quadruple in the third quarter. And Fifth Third Bancorp said it’s pulling back on originations.

The Federal Trade Commission announced today that it is exploring a rule to crack down on junk fees proliferating throughout the economy. Junk fees are unnecessary, unavoidable, or surprise charges that inflate costs while adding little to no value. Consumers can get hit with junk fees at any stage of the purchase or payment process. Companies often harvest junk fees by imposing them on captive consumers or by deploying digital dark patterns and other tricks to hide or mask them. The agency is seeking public comment on the harms caused by junk fees and the unfair or deceptive tactics companies use to impose them.

Many people might feel disgusted when they spot the price of a box of butter, a bag of salad or, frankly, just about anything else at the supermarket. But generally, many can keep spending, especially if they've gotten a raise at work or they're fortunate enough to have some cash sitting on the sidelines.

Yet make no mistake, plenty of people are on edge as they see inflation soar, jobs get cut at some major companies and some homes for sale sit a bit longer on the market than they did just months ago.

The nationwide average price of a gallon of gas has fallen 8 cents in the past week, now sitting at $3.84, according to AAA. The Biden administration has announced plans to release millions of additional barrels of oil from the Strategic Petroleum Reserve this winter, anyway.

Georgians are paying the lowest prices in the nation today, at $3.24 per gallon. California residents see the highest pump prices — $5.88.

Prices briefly flirted with $4 per gallon early this month as the nation’s supply took several hits. A refinery fire in Ohio and seasonal maintenance at some processing centers combined to lower the nationwide stock of gasoline. Then the OPEC+ consortium of oil-exporting countries voted to slow oil production.

The Federal Trade Commission acted against auto dealer Passport Automotive Group for deceiving consumers by tacking hundreds to thousands of dollars in illegal junk fees onto car prices and for discriminating against black and Latino consumers with higher financing costs and fees. Passport, its president, Everett Hellmuth, and its vice president, Jay Klein, will pay more than $3.3 million to settle the FTC’s lawsuit, which will be used to refund consumers harmed by Passport’s conduct.

The Federal Trade Commission at its meeting Thursday voted to publish an advance notice of proposed rulemaking (ANPR) on “junk fees.”

FTC Chair Lina Khan and Commissioners Alvaro Bedoya and Rebecca Slaughter voted in favor of publishing the ANPR, and Commissioner Christine Wilson voted against it. GOP Commissioner Noah Phillips stepped down from the FTC this month, according to a news release.

The item considered at the FTC’s open meeting states it will “initiate a rulemaking proceeding addressing junk fees that are charged for goods or services that have little or no added value to the consumer. The ANPR seeks comment on the prevalence of junk fees and the consumer harms arising from junk fee practices, among other questions.”

TAYLORSVILLE — A man who police believe has helped orchestrate catalytic converter thefts across Salt Lake County has been arrested and charged by the Utah Attorney General's Office.

Omar Ernesto Martinez-Gomez, 47, of Salt Lake City, was charged Wednesday in 3rd District Court with money laundering, engaging in a pattern of unlawful activity, and possession of stolen property, all second-degree felonies.

The investigation dates back to at least July 2021 when Taylorsville police arrested a man in possession of a stolen vehicle and two stolen catalytic converters, according to charging documents. The man told investigators he would steal the converters and sell them to a man named "Omar," the charges state.

“Where do we even begin?” It’s a question being asked at car dealerships across the country as they race to comply with updates to the FTC Safeguards Rule released late last year. With the deadline less than two months away, automotive dealers are in a sprint to understand the specific steps they need to take to get into compliance.

Mike Pedrick, VP of Cybersecurity Consulting at Nuspire, and Tony Haux, CISO and Chief Compliance Officer at Accelerate2Compliance, recently hosted a webinar to help auto dealers navigate the complexities of the Rule. Read on to hear their tips.

The Federal Trade Commission is taking action against auto dealer Passport Automotive Group for deceiving consumers by tacking hundreds to thousands of dollars in illegal junk fees onto car prices and for discriminating against Black and Latino consumers with higher financing costs and fees. Passport, its president, Everett Hellmuth, and its vice president, Jay Klein, will pay more than $3.3 million to settle the FTC’s lawsuit, which will be used to refund consumers harmed by Passport’s conduct.

As many dealers are aware, the Federal Trade Commission (FTC) recently issued new requirements to its Safeguards Rule that take effect Dec. 9. The rule requires auto dealerships with more than 5,000 customer records in their database to develop, implement and maintain an information security program to protect customer information.

To help with compliance, many dealers have hired third-party service providers such as a DMS vendor, law firm or information technology (IT) firm to write, implement and supervise the required information security program.

It’s restating the obvious, but the car business doesn’t operate in a vacuum. This is especially the situation when it comes to the pre-owned side of things. Record-setting new vehicle prices and rising interest rates are driving customers to used offerings as shiny new rides become less affordable.

All of this coincides with a drop in second-hand vehicle values. The Manheim Used Car Price Index, which tracks wholesale numbers, dropped almost 13% since the beginning of the year. The figures aren’t as dramatic on the retail front, but average transaction prices are declining, according to the CarGurus Used Car Index. The online marketplace’s data shows the typical pre-owned vehicle now sells for $30,361 (as of this writing), down from a July record of $30,844. At the start of the year, the number stood at $30,524.

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) decreased 3.0% in September from August. The Manheim Used Vehicle Value Index declined to 204.5 and is now down 0.1% from a year ago. The non-adjusted price change in September was a decline of 2.1% compared to August, moving the unadjusted average price down 2.3% year over year.

In September, Manheim Market Report (MMR) values saw larger-than-normal declines that were consistent over the month, culminating in a 2.5% total decline in the Three-Year-Old Index over the last four weeks.

Electric Vehicle (EV) fires are in the news. While vehicle fires are nothing new, there is a concern that EVs might be more prone to fires than ICE vehicles, even if recent studies with the limited data available do not support the concern. It is no debate, however, that when a lithium-ion battery from an EV catches fire, the fire presents unique challenges:

• An EV battery fire is a lot hotter (up to 4,900 degrees Fahrenheit compared to 1,500 degrees Fahrenheit),

• An EV battery fire takes a lot more water to extinguish (sometimes as much water as needed to extinguish a house fire), and

• An EV battery fire lasts a lot longer (over an hour in some instances)

Oct 3 (Reuters) - Major automakers are expected to report modest declines in U.S. new vehicle sales on Monday but analysts and investors are concerned that a darkening economic picture, not inventory shortages, will lead to a drop in future car sales.

Thus far, a shortage of cars due to supply disruptions, combined with a preference for personal transport, has seen consumers willing to shell out more money, largely protecting profits at automakers and auto dealers who have pulled back on discounts.

But used-car dealer CarMax Inc (KMX.N) rang the alarm bells on Thursday, suggesting consumers were beginning to pull back from big-ticket purchases due to decades-high inflation.

SALT LAKE CITY — There's a lot of excitement surrounding electric vehicles these days, and more of them on Utah roads. Rocky Mountain Power hosted an electric vehicle car show Tuesday to show off the latest options.

EVs are changing and becoming a choice for more drivers.

It's National Drive Electric Week, and with recently announced federal tax incentivesand expanding charging infrastructure, more Utahns are driving electric, saving money and polluting less.

"We're at the beginning of the change," said James Campbell, the innovation and sustainability director for Rocky Mountain Power. He said we're at the threshold of rapid adoption of electronic vehicles. "We're right at that spot where it's about to take off."

Tires are one of the major keys to customer retention. It has taken a decade or more, but most dealers now realize this is true. But what if I told you tires could play an even bigger role in the future of your dealership. Electric Vehicles are coming at us like a train on the tracks, and there is one aspect of these vehicles no one is talking about: They don’t need an oil change! So what, not a big loss, right? Wrong! The oil change has been the reason or trigger for the service visit for the last 50-plus years. It’s not about the lost revenue from this service. It’s the fact that without the oil change as the trigger for the scheduled visit, the customer has no reason to come back to your service department. Every maintenance package on every car has one thing in common: an oil change. We have built packages around this simple service since the ‘50s. And it’s gone with EVs.