News

The auto sector is one of the victims of the aggressive interest rate hikes by the Federal Reserve to crush inflation, which is at its highest in 40 years. 

According to experts, this monetary policy has increased the cost of credit, and more particularly, the cost of car loans. Rising interest rates will make consumers reevaluate their decisions before quickly jumping into a car loan, experts at Edmunds.com recently warned.

"Interest rates for new and used vehicles are skyrocketing", the research firm found.

The economy is currently in a critical state, despite the efforts of the current administration to downplay it. In July, severe mortgage delinquencies increased 55 percent over pre-pandemic levels. Meanwhile, foreclosures grew 12 percent in August from July 2022 and increased 187 percent from 2021, according to data from ATTOM. To make matters worse, foreclosure filings have continued to rise each month since this summer. Additionally, 32 percent of American consumers are having trouble paying their bills. Furthermore, the growth in real average hourly earning isn’t keeping up with inflation, pushing households to borrow more.

Automobile shoppers say retailers’ transparency is a critical part of building and maintaining trust in the sales and service process, according to a recent survey commissioned by AutoAp Inc. and Rapid Recon.

“Consumer Transparency Expectations" found that consumers still trust automobile dealerships -- new car dealers scored 80% when consumers were asked to rate trust, while transparency rated 92%, with 100% being extremely important.

We’ve used cars for quite some time now, and they’ve become a very accessible commodity. Brands like BMW, Jeep, Mercedez, and many more produce high-quality vehicles with unique features, not to mention electric and hybrid rides that are said to be the future transportation of choice. 

However, just some 200 years back, such things were unimaginable to a regular person, and the early prototypes, though impressive for that time, didn’t manage to find their niche. It’s amusing to think that horse carriages were still more cost-effective in those days. 

CENTREVILLE, Va. (Dec. 6, 2022) – The CARFAX database, the largest vehicle history database in the world, now includes more than 30 billion records, the company announced today. CARFAX data is a resource that helps millions of people shop, buy, service, and sell used cars more confidently. This milestone came from one of the more than 131,000 sources that report vehicle information directly to CARFAX.

CARFAX was founded in 1984 to combat odometer fraud. It took more than 15 years for the company to reach 1 billion records. CARFAX has continued its relentless pursuit of data, and the company now loads a billion records about every 5 months. 

Next year could be the light at the end of the tunnel for the chip shortage that slashed vehicle inventory for the past two years — and that could mean good news for weary car buyers.

The chip shortage has pummeled the global auto industry for years, depressing dealership inventory levels and driving up new and used vehicle prices. But experts from AutoForecast Solutions say that by the end of 2022, the semiconductor shortage won't be nearly as bad as it was last year. Better yet, 2023 could look even rosier.

On December 1, 2022, nationwide used car dealer CarMax Auto Superstores, Inc. (“CarMax”) and 36 state attorneys general announced a $1 million multistate settlement that will require CarMax to disclose open recalls related to the safety of its used vehicles before consumers purchase them. The settlement resolves an investigation into CarMax’s advertising and sales practices related to vehicle recalls since 2014.

The AICPA passed a new credit loss measurement standard (called “CECL”) which requires your implementation effective January 1, 2023, for BHPH operators who carry financial instruments (receivables). The new requirement was issued in Accounting Standards Update 2016 – 13 – Financial Instruments – Credit Losses (Topic 326) and its initial implementation was deferred until 2023. This new standard applies whether the financial instruments (like BHPH installment contracts) and lease receivables are carried on or off the balance sheet. Under current accounting standards (GAAP),

The Federal Trade Commission joined the Consumer Financial Protection Bureau (CFPB) in filing an amicus brief with the U.S. Court of Appeals for the Eleventh Circuit in the case of Louis v. Bluegreen Vacations Unlimited, Inc. The brief asks the appeals court to overturn a lower court decision that denied servicemembers the right to sue to invalidate a contract that they allege violates the Military Lending Act.

Interest-rate hikes from the Federal Reserve are raising average monthly car payments despite falling prices for used cars, according to a study.

The average monthly payment for used cars is 47% higher this year, hitting $551 a month, as compared to 2019, according to analysts at Cox Automotive, a platform that facilitates faster vehicle transactions.

The firm expects monthly car tabs to keep increasing, touching $570 by the end of the year, with the trend continuing in 2023.

By now almost everyone knows that the auto industry is still short semiconductor chips, although the situation seems to be improving. While it’s pretty much a given that electric vehicles use more semiconductors, why do gasoline-powered internal combustion engine (ICE) vehicles use so many chips? And do these chips have attributes that make it harder to crank up the manufacturing capacity when they are in short supply? That’s what this article will try to explain.

The Federal Trade Commission today announced it is extending by six months the deadline for companies to comply with some of the changes the agency implemented to strengthen the data security safeguards financial institutions must put in place to protect their customers’ personal information. The deadline for complying with some of the updated requirements of the Safeguards Rule is now June 9, 2023.

The Safeguards Rule requires non-banking financial institutions, such as mortgage brokers, motor vehicle dealers, and payday lenders, to develop, implement, and maintain a comprehensive security program to keep their customers’ information safe.

Subprime auto loan borrowers are increasingly falling behind on payments, and the value of used cars is dropping, two trends that are clobbering bonds tied to the debt.

Yields on some of the riskiest such bonds have jumped to about 6.5 percentage points more than Treasuries as of last week, a risk premium that’s widened up about 2 percentage points from the end of September, according to data compiled by JPMorgan Chase & Co. Excluding a few weeks during the pandemic, current levels are the widest since 2010.

The New York Police Department said thieves made off with over two dozen vehicles from a luxury car dealership in Queens in the middle of the night on Sunday.

Thieves cut the power to the Carsiri car dealership on Queens Boulevard sometime Sunday night, knocking out the surveillance videos before breaking the locks on the security gate, entering the office and taking the keys to the cars, WNYW-TV reported.

In total, the thieves drove off with 26 cars worth hundreds of thousands of dollars, police say.

With inflation cutting into the budgets of Americans, a growing percentage of people with auto loans are struggling to make their monthly payments.

TransUnion, which tracks more than 81 million auto loans in the U.S., said Tuesday the percentage of loans that are at least 60 days delinquent hit 1.65% in the third quarter, the highest rate for 60-day delinquencies in more than a decade

“Consumers still want to stay current as best that they can. It’s just this inflationary environment is making it challenging,” Satyan Merchant, senior vice president of TransUnion, told CNBC. “It leaves fewer dollars in their pocket to make the auto loan payment, because they’ve got to pay more for eggs and milk and other things.”

Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) decreased 2.2% in October from September. The Manheim Used Vehicle Value Index declined to 200.0 and is now down 10.6% from a year ago. The non-adjusted price change in October was a decline of 2.1% compared to September, moving the unadjusted average price down 9.3% year over year.

In October, Manheim Market Report (MMR) values saw smaller-than-normal declines that were relatively stable over the month, culminating in a 2.2% total decline in the Three-Year-Old Index over the last four weeks. Over the month of October, daily MMR Retention, which is the average difference in price relative to current MMR, averaged 98.2%

As new-car sales dropped during the last year due to supply-chain disruptions, so did vehicle trade-ins, leaving dealers to face an unprecedented shortage of used-car inventory. But dealers have been extremely resilient in the face of yet another round of adversity. Here Dennis McGinn, the chief executive officer of Rapid Recon, and Cam Hitchcock, the chief executive officer of America’s Group (which owns America’s Auto Auction), explain how dealers keep putting car buyers behind the wheel of used vehicles by adopting new strategies and technologies.

Federal, state, and local law enforcement partners from across the United States executed a nationwide, coordinated takedown today of leaders and associates of a national network of thieves, dealers, and processors for their roles in conspiracies involving stolen catalytic converters sold to a metal refinery for tens of millions of dollars.

Arrests, searches, and seizures took place in California, Oklahoma, Wyoming, Minnesota, New Jersey, New York, Nevada, North Carolina, and Virginia. In total, 21 individuals in five states have been arrested and/or charged for their roles in the conspiracy.

As expected, the Fed raised the target for the Federal Funds Rate by three-quarters of a percentage point today, which was the fourth straight jumbo increase this year. The biggest news from the Fed’s move was the indication that future increases may be smaller and slower to come.

The Fed has now moved the target rate by 375 basis points (BPs), the most in any year since 1981. By December, the rate moves this year are expected to surpass 1981 and will only be bested by 1980.

The natural level for the short-term rate is widely thought to be 2.5%. With the Fed Funds Rate now at 3.75% – 4.00%, the Fed has tightened the choke on the American economy to the point that the engine is likely to stall out.