Ford 2nd in sales with bank assistance; Interesting facts on brands and finance

[PREMiERdrum]

 

Experian, the US credit reporting agency, recently concluded a study into the financing and credit scores of US car buyers.

 

Audi was ranked fourth by consumer credit score, Porsche seventh and Mercedes-Benz ninth, yet the fact that Volvo outranks them in this metric is probably a plus to its bottom line but not necessarily its image. It's not unfair to say more people desire those other luxury brands – Volvo itself has admitted as much – and people in the throes of desire have been known to be a little more let-it-ride about things like credit scores. The differences aren't huge, though: compared to Volvo's 818, Audi shoppers scored at 813, Mercedes shoppers 802. Lexus and Acura intenders took the other two steps on the top-credit-scores podium.

Mitsubishi took the honors at the other end of the charts, Experian finding that its potential customers, with an average of 604, had the lowest scores. Mitsubishi was followed by Suzuki and Dodge. On the other side of the financing table, Toyota led the way in how many of its vehicles were bought with bank assistance, followed closely by Ford, Chevrolet taking third place. Also of note, and for whatever it's worth, not one automaker made both the 'top ten by financing' and 'top ten by credit score' lists, but four made both the financing and 'bottom ten by credit score' lists: Chevrolet, Nissan, Kia and Dodge.

 

http://www.autoblog.com/2013/01/02/volvo-buyers-have-best-credit-scores-among-all-auto-shoppers/

 

 

Interesting highlights...

 

- Lowest three average credit scores: Mitsubishi, Suzuki, Dodge

- Highest sales with bank assistance: Toyota, Ford, Chevrolet

- Chevrolet, Dodge, Nissan, and Kia all present on both "Number Financed" and "Bottom 10 by Credit Score" lists

[silvrsvt]

What do they mean by bank assistance?

[jpd80]

What do they mean by bank assistance?

That Autoblog article was poorly written, the press release contained in the link is much better:

 

 

Schaumburg, Ill., Dec. 04, 2012 - Experian Automotive today announced that Toyota grabbed top honors in Q3 2012, claiming 14.09 percent of all new vehicles financed. Ford was second with 13.16 percent, and Chevrolet was third with 11.10 percent. Findings from its Q3 State of the Automotive Finance Market analysis showed market share for nonprime, subprime and deep-subprime automotive loans for new vehicles grew by 13.6 percent and new vehicle leasing grew by 7.53 percent year over year.

 

The analysis found that loans financed for new vehicles to customers with nonprime, subprime or deep-subprime credit ratings increased to 24.84 percent in Q3 2012 from 21.87 in Q3 2011. For used vehicles, the total subprime financing market increased 5.47 percent year over year to 54.43 percent in Q3 2012, up from 51.60 percent in Q3 2011.

 

"With leasing showing a continued upward trend, and lenders increasing their appetite for risk, consumers were in a good position to obtain a vehicle during Q3," said Melinda Zabritski, director of automotive credit at Experian Automotive. "Expanding loans to lower-risk tiers opens the market for more car shoppers, while an increase in leasing means it is easier for consumers to get more vehicle for a lower monthly payment. Both of these trends are positive signs of a strong and recovering auto finance market, which ultimately benefits the consumer and the entire auto industry."

Edited January 2, 2013 by jpd80

[RichardJensen]

What do they mean by bank assistance?

Loans or leases.

 

Intriguingly, Lincoln borrowers have higher credit scores than Cadillac borrowers. And BMW borrowers. And their credit scores are almost equivalent to Mercedes.

 

It is perhaps disturbing that four of five Fiat brands are in the bottom ten.

Edited January 2, 2013 by RichardJensen

[jpd80]

Loans or leases.

 

Intriguingly, Lincoln borrowers have higher credit scores than Cadillac borrowers. And BMW borrowers. And their credit scores are almost equivalent to Mercedes.

 

It is perhaps disturbing that four of five Fiat brands are in the bottom ten.

It would be interesting to know what proportion of luxury vehicles are in fact leased versus bought outright.

I have a feeling that when it comes to MB, BMW or even Jaguar, you'd be a fool not to have a lease,

outside of warranty, the cost of mechanical repairs can be horrendous for those owners..

Edited January 2, 2013 by jpd80

[silvrsvt]

Loans or leases.

 

Intriguingly, Lincoln borrowers have higher credit scores than Cadillac borrowers. And BMW borrowers. And their credit scores are almost equivalent to Mercedes.

 

It is perhaps disturbing that four of five Fiat brands are in the bottom ten.

So basically instead of Ford Motor Credit doing the underwriting for the loan, a bank does instead for subprime buyers?

[NickF1011]

So basically instead of Ford Motor Credit doing the underwriting for the loan, a bank does instead for subprime buyers?

 

Or sometimes you can just get better rates than Ford Motor Credit will offer. Ford wasn't offering any financing deals when I bought my Edge and I ended up getting a lower rate through Capital One than through FMC. The difference was like 4.2% compared to 4.9%, but still...

[silvrsvt]

Or sometimes you can just get better rates than Ford Motor Credit will offer. Ford wasn't offering any financing deals when I bought my Edge and I ended up getting a lower rate through Capital One than through FMC. The difference was like 4.2% compared to 4.9%, but still...

That I understand also, and most likely the route I'm going when I get a new car...I'll take the rebates and bring my own financing

[grbeck]

It would be interesting to know what proportion of luxury vehicles are in fact leased versus bought outright.

I have a feeling that when it comes to MB, BMW or even Jaguar, you'd be a fool not to have a lease,

outside of warranty, the cost of mechanical repairs can be horrendous for those owners..

I recall reading that the majority of BMW 1- and 3-Series on the road in this county, along with the Mercedes C-Class, are leased (don't have a link, though).

 

In Europe, many cars in this class are received as an employee perk as a way to get around high income taxes. The employee has use of the car, but the employer buys it, maintains it, and then sells it. Which is one reason why Europeans don't place as much emphasis on reliability as Americans do.

 

The lease deals in this country, to some extent, replicate this scenario for Americans. Lease it, receive free maintenance during the term of the lease, and turn it in for a new one when the lease expires (along with any warranty). Just don't be the sucker, I mean, person, who buys the cars used without any sort of warranty.

[RichardJensen]

So basically instead of Ford Motor Credit doing the underwriting for the loan, a bank does instead for subprime buyers?

No, it would include FMC leases & loans.

[Phugoff]

Usually if you have decent credit it's better to go outside then to use FMC

[SoonerLS]

Just don't be the sucker, I mean, person, who buys the cars used without any sort of warranty.

With all the cars I've bought, I've only intentionally purchased an extended warranty once, when I was young and foolish, and I've been money ahead on it. (The other time, a slimeball finance manager snuck one into the paperwork I was signing after I told him I did not want it--one of several unpleasant experiences I've had at area Ford dealerships.) I'm not sure if I'll continue that practice, though--these newer cars are too damned expensive, both to buy and to repair...

[Pioneer]

Usually if you have decent credit it's better to go outside then to use FMC

The last 4 cars I've bought have been 0% financing through Ford Credit. Can't get better than that.

[akirby]

The last 4 cars I've bought have been 0% financing through Ford Credit. Can't get better than that.

 

Although they usually offer the option of a cash rebate in lieu of 0% which could be better depending on how much you're financing for how long and the bank/credit union rate.

[fordmantpw]

Although they usually offer the option of a cash rebate in lieu of 0% which could be better depending on how much you're financing for how long and the bank/credit union rate.

 

Not to mention, if the vehicle is totaled, or you get rid of the vehicle after only a couple years (I think Pioneer keeps his vehicles a while), the 0% doesn't look quite as sweet compared to the cash rebate.

[SoonerLS]

The last 4 cars I've bought have been 0% financing through Ford Credit. Can't get better than that.

When I bought my LS, you could get 0% financing from Ford Credit or an $8K rebate (which actually ended up being more like an $18K rebate by the end of the fire sale). If you take the $8K rebate on a $42K car and get 4.9% on a 72-month loan, that only comes to a bit more than $39.3K. Admittedly, that's an exceptional case, but taking the rebate was better than taking the 0%. (Those are just made-up numbers; I don't remember what I got from the credit union, or what sticker was on my LS, but taking all the rebates was a much better deal than taking the 0%.)