THE DAILY RANT!

Today’s Automotive News features an article entitled “Longer loans, rising leases may come at a price” The teaser under the headline reads: “What's driving the gains in U.S. auto sales this year? That's simple: Easy credit, in the form of subprime lending and longer loan terms, plus a rise in leases -- the exact same trends that have a growing number of executives and analysts now raising red flags about whether the current sales boom is sustainable”: Let me start off by saying that anyone who thinks credit is “easy” hasn’t sat in the F&I seat lately. Yes there are some lenders that are loosening up their wallets, and maybe buying some loans they shouldn’t. I just transferred from a store where the new created captive lender was buying subprime customers at lower than expected rates, without any stips! When they started up, I told my other lenders I was going to ride that horse until it broke all four legs, fell apart in the back stretch and they served it up as filet mignon! Well, the race was over around September, and suddenly, those 75 month terms with a LOWER rate that 72 months (they claimed it was a computer error) and no POI loans were gone. No more exceptions, no more over advances, no more outrageous approvals. Yes, they accomplished their goal of capturing a large percentage of loans from the dealer base, but let’s see how the portfolio performs. I think it’s safe to say that most of the players left in the subprime arena learned their lessons the hard way a few years ago. Many of the players left the field bruised and battered (HSBC, Triad, Centrex) never to return. Those that came back re-evaluated their positions (AmeriCredit, Capital One, Santander) and have survived with a smart business model that seems to be working. Customers once again are returning to our showrooms, although lately many are concerned about whether our government will join the ranks of subprime buyers! Many of our customers once had great credit, only to be hammered by declining home values along with declining paychecks or no paycheck at all. I am amazed on a daily basis by some of the hard luck stories I hear. But to think that we are in the midst of “easy credit” is unrealistic at best. I only wish that were the case, because I would have three times the number of vehicles delivered this month! I always say that I can get almost any customer approved for a loan. I think most of us can say that. But the caveat that goes with it is that the customer has to be willing to meet the terms and conditions of that approval. Just because the customer wants no money down, or extended terms on a high mileage unit (maybe it’s the sales desk and not the customer who came up with that idea) doesn’t mean they will get it. If it were easy, anybody could do our job SUCCESSFULLY and PROFITABLY. It ain’t easy by any stretch of the imagination, but let the pundits keep saying it is. They keep bringing customers in and give us the chance to make it happen. Man, it’s good to be where I belong! .