Tag Archives: auto loan portfolio buyers
Executive to Watch Ian Anderson: Looking beyond the next wave
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PSA-Fiat Chrysler scouts US financing partner
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Executive to Watch Charles Jones: Humble origins, bright future
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The all-star of Ally Financial: Doug Timmerman Auto Finance Executive of the Year
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Delinquency rates push up subprime APRs
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Reagor-Dykes employee admits to $27M floorplan scam
Prosecutors have secured their 10th guilty plea in the on-going Reagor-Dykes case, according to court documents filed in Amarillo, Texas on Wednesday.
Elaina Marie Cabal, former finance assistant and office manager at two Reagor-Dykes dealerships, pled guilty to conspiracy to commit wire fraud. Cabal’s guilty plea is the second dealership employee to admit guilt this month.
Read more: 9th person pleads guilty to scamming Ford Credit in Reagor-Dykes case
Cabal was material in conspiring with former Chief Financial Officer Shane Smith in providing Ford Motor Credit Co. with false information regarding vehicles at the dealership, receiving additional financing from Ford Credit, and delaying payment to the captive for vehicles previously sold in the floorplan fraud scheme that totaled $27 million.
The breakdown is as follows: 409 vehicles worth $13.8 million were absent from the dealership chain’s inventory; 352 vehicles were sold and funded, totaling $11.6 million; and 37 vehicles worth $1.6 million were “double-floored.”
Cabal’s sentencing hearing is scheduled for April 14, 2020. She faces up to five years in prison, a maximum fine of $250,000, and restitution payments equal to the total loss Ford Credit incurred as a result of the floorplan scheme.
The dealership chain is currently awaiting approval from the United States Bankruptcy Court on its $14 million restructuring plan that the dealership chain hopes will keep some of its locations in operations. GM Financial, another floorplan financier for the Lubbock-based dealer group, is fighting the proposal in court, calling it “inadequate.”
Read more: GM Financial opposes second Reagor-Dykes restructuring plan
For more content like this, join us at the upcoming Auto Finance Accelerate event, March 9-11, at the Omni San Diego. Combining three crucial topics in auto lending and leasing, Auto Finance Accelerate dives into the strategies and knowledge needed to enhance your company’s auto finance sales, marketing, and innovation. Register before Friday, January 31st to save with early registration rates. Visit www.AutoFinanceAccelerate.com to learn more.
Weakening credit quality to bog down auto ABS in 2020
Loan quality within auto securitizations is expected to weaken, driven by higher delinquencies and a potential economic slowdown, according to a Moody’s Investor’s Service 2020 outlook.
While the risk of a recession should limit loose underwriting, lenders continue to actively pursue nonprime customers, Moody’s said. “Auto originations are no longer being bolstered by borrowers with especially strong credit profiles relative to U.S. consumers in general,” the report said. The rating agency noted that several auto loan ABS shelves will continue to include obligors “with very low scores” next year, as will a handful of lease deals.
Additionally, other collateral attributes outside of credit quality, such as lengthening loan terms and elevated loan-to-value ratios, continue to worsen. However, a solid job market and used-car price strength should offset those risks. Specifically, prime auto finance exhibits strong credit quality, even as the share of borrowers falling 90-or-more days delinquent continues to rise in other consumer debt categories. Used-car market strength will likely buoy slower new-car sales and support loan recovery rates and residual value performance in lease deals.
For more content like this, join us at the upcoming Auto Finance Accelerate event, March 9-11, at the Omni San Diego. Combining three crucial topics in auto lending and leasing, Auto Finance Accelerate dives into the strategies and knowledge needed to enhance your company’s auto finance sales, marketing, and innovation. Register before Friday, January 31st to save with early registration rates. Visit www.AutoFinanceAccelerate.com to learn more.
Asbury inks $1B deal to acquire luxury dealership chain in 2020
Asbury Automotive Group is acquiring Dallas-based Park Place Dealerships in a $1 billion all-cash transaction expected to close in the first quarter 2020, the company announced today.
The newly inked deal adds 17 new vehicle franchises to Asbury’s operations, bringing its total to 124 franchises spread across 88 dealerships. The majority of the Park Place Dealerships are located in the Dallas market and include new-vehicle franchises from Mercedes-Benz, Lexus, Jaguar, Land Rover, Porsche, Volvo, Bently, Rolls Royce, McLaren, Maserati, Karma, and Sprinter.
In addition, Asbury intends on opening a Jaguar/Land Rover franchise dealership in Austin, Texas, “late” in the first quarter of 2020, the company noted.
“This acquisition will transform our total portfolio to 50% luxury stores and add approximately $2 billion in expected annualized revenues,” said Asbury’s President and Chief Executive David Hult. The transaction will also increase Asbury’s geographic mix to 36% of revenue derived from the Texas market.
The new-vehicle retailer is betting the luxury segment is “more resilient” during a downturn, the company noted. “[Luxury segements] tend to have higher and more stable margins, fewer dealers nationwide, and a higher portion of gross profit from parts and service.”
The breakdown of the purchase price includes $785 million of goodwill — the cost to purchase the business minus the fair market value of the tangible assets — $215 million for real estate and leasehold improvements, and $30 million for parts and fixed assets.
For more content like this, join us at the upcoming Auto Finance Accelerate event, March 9-11 at the Omni San Diego. Combining three crucial topics in auto lending and leasing, Auto Finance Accelerate dives into the strategies and knowledge needed to enhance your company’s auto finance sales, marketing, and innovation. Register before Friday, January 31st to save with early registration rates. Visit www.AutoFinanceAccelerate.com to learn more.
The changing terrain of compliance in 2020