CFPB, Nonprime Among Hot Issues at Auto Finance Summit 2012

Auto Finance News

The recovery of the auto industry is a continued evolution, and as we ebb closer to yearend, many questions still remain about what’s to come in 2013 and beyond. Many of these concerns were addressed today at the 12th annual Auto Finance Summit at the Encore Las Vegas.

The summit’s speaker faculty addressed a host of topics, from economic trends and the impact the Consumer Financial Protection Bureau to leasing and the nonprime business.

“To say the last four years were volatile would be an understatement,” said George Borst, president and CEO of Toyota Financial Services, during his keynote address, which kicked off the Summit. “We placed a huge bet on leasing, only a few of us stayed in the leasing market. During the last four years, our lease marketshare in the markets we compete in is 99%. This helped our dealers and customers and our divisions through a very turbulent time.”

As TFS is starting to see lease terminations on those vehicles now, it sees 62% of those consumers staying loyal to Toyota — and “one in four cars coming off lease for the entire industry will be a Toyota.”

One of the Summit’s hot-point issues, which came up during the opening remarks and stayed on topic through many of the day’s eight sessions, was the CFPB. While there are still many unknowns in terms of the regulatory agency, of dealer markups, Eric Reusch said, “We’re not here to restrict dealers’ ability to be compensated in the work they do in originating contracts.”

It’s expected that used-car prices will increase next year, “but it won’t be at the level it was pre-crisis,” said Elen Callahan, director of Deutsche Bank during the panel “Focus on Funding: An Assessment of Today’s Capital Markets. “It’s going to act as a natural check to new vehicle sales, so I’m pretty confident that 2013, 2014 will remain pretty robust, even if we continue to normalize, which I expect from what we’ve seen past two years. I think it will be a soft landing, but it has a way to go before it goes to historic averages seen in the Manheim Index.”

While things continue to look up as 2013 draws near, some are still erring on the side of caution as heard in the “Seizing the Nonprime Opportunity” panel discussion.

“I spend most of my time planning for the next recession,” said Charles Bradley, president and CEO of Consumer Portfolio Services Inc.

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