Most dealers are aware that the federal Justice Department is paying extra-close attention to the ways and means of automotive financing.

justicedept Feds Step Up Retail Automotive Financing Inquiries This week brings more news of the department’s interest in potential racial disparities in retail loans among captive and non-captive lenders, with J.P. Morgan Chase acknowledging it’s also been asked to provide regulators details on its lending practices and standards.

In addition, a Justice Department official says the agency is also concerned about the growing trend of auto loan securitization. A Bloomberg news report says this investigation follows Justice Department concerns that the rapid rise of auto loan-backed securities could lead to deceptive, discriminatory and fraudulent practices that marked the build-up and bursting of the mortgage-backed securities market a few years ago.

I was particularly struck by the official’s characterization of the inquiry’s decidedly proactive nature. “We can and should use our experience investigating mortgage-backed securities to be on the lookout for, and head off, any potential threat, rather than waiting until after losses have been suffered,” the official says.

I know a few dealers who feel insulted by the distrust that’s inherent in the Justice Department’s auto securitization inquiry. “We dot every ‘i’ and cross every ‘t’ in our F&I offices,” says the head of a dealer group in the Northwest. “We’d be out of business if we tried to pull the kinds of stuff mortgage brokers got away with. It’s off-putting, to say the least, that dealers don’t seem to be getting any benefit of the doubt.”

It’ll be interesting to see if anything substantial comes from the Justice Department’s query. In the meantime, it’d be wise for dealers, particularly those who’ve come to over-rely on F&I income to drive dealership profitability, to mind another quote the Justice Department official offered, “We shouldn’t wait until there is a crisis to pay attention.”



Memories From The Mountain Carry On

by dpollak on 02/13/2015 · 0 comments

I just received more photos from my recent No Barriers ski adventure with Erik Weihenmayer.

Their arrival, via e-mail and a Dropbox link, reminded me of how far we’ve come since our family ski trips when I was a kid: You’d drop your film off at a local camera shop or drug store, and wait a week or more for word that your prints had arrived—hoping for the best.

The photos recharged the friendships and memories we made on the mountain, which have proved transformative in so many ways for me.

Ryan “Buck” Ross, who headed the production team that filmed and photographed our time at Beaver Creek, says he especially likes how many of the photos of me feature a smile. “I remember seeing you the first day, with a look of uncertainty as we got started,” he says. “After our first run, that expression changed to a smile that never went away.”

Here are a few images, taken by photographer Sean Boggs, from the trip:



I recently heard a National Public Radio story that sounds kinda crazy. In Sweden, they’re landing airplanes without the benefit of an on-the-ground air traffic controller.

The person who informs pilots of local wind/other conditions sits in a tower 100 miles away. But thanks to a sophisticated camera/sensor system, he’s apparently got a reliable bird’s eye view of the airport, and so far the technology-driven remote guidance is working well.

To be sure, this aviation innovation is occurring at a rural airport, where flights are far less frequent than Midway or O’Hare in Chicago.

ButAcuraNSX An Insight From Air Traffic Control Automation, even so, I couldn’t help but think: If the Swedes can land an airplane full of people without an air traffic controller sitting next to the runway, don’t you think it’s feasible that a dealer can buy a car without standing next to it in the auction lane?

I understand why some dealers resist buying cars sight-unseen. There’s definitely a greater risk, and there’s always merit to seeing, smelling and touching a car before you buy it.

But the best-performing used vehicle dealers I know rely on buying auction cars online. They’ve found such purchases are necessary to reduce costs, increase efficiencies, keep managers in the store to work deals and maintain an aggressive throughput of retail units.

These dealers also tell me that the online purchase/delivery/as-needed arbitration  processes work pretty well. There’s less risk for buyers than there used to be, and auction companies recognize their reputations increasingly rest on proving that dealers can trust their online marketplaces to acquire needed inventory.

Again, I recognize that some dealers may never be comfortable with the way new technologies are changing the business. But I would suggest they consider that if pilots trust themselves and a planeload of passengers to technology, maybe it’s time to put the fears of buying a car online to the test.



Rethinking The Problem Of Serving Subprime Customers


Industry analysts estimate that subprime customers account for about 25 percent of used vehicle financing deals in the past year. With this stat as a backdrop, many dealers are eyeing the subprime segment in the current year as they extend their goals for used vehicle market share and sales. To achieve this goal, some dealers [...]

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A Different Kind Of Ski Lesson: A No Barriers Approach To Business


I’m still reliving and re-appreciating last week’s No Barriers ski adventure in Beaver Creek, Colo. Over the weekend, as I was replaying the experience in my mind, I found myself asking questions again and again: Why did the entire experience feel a little like magic? What made this adventure so special, beyond giving me the [...]

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Time To Give Thanks For A Life-Changing Gift


Our final day here at Beaver Creek started as soon as the slopes opened. It’s been another picture-perfect day on the mountain, with mild temperatures, plenty of sunshine and relatively uncrowded runs. As I rode the lifts today, I couldn’t help but feel an overwhelming sense of gratitude for the opportunity to take part in [...]

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Trust, Teamwork And Inspiration At 11,000 Feet


We’ve just wrapped up our first day of skiing at Beaver Creek. It’s been an incredible day that saw three key themes emerge. Trust: After we got our gear, we drilled the verbal commands and cues our guides would use to help us ski safely down the mountain. We started on the blue, intermediate slopes [...]

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Anticipation Builds In Beaver Creek


I’m in Beaver Creek, at an outdoor bar at our hotel, near the fireplace. The smell of mesquite and the sounds of a band playing “Southern Man” by Neil Young fill the air. It’s a perfect evening—a fitting set-up for what promises to be a memorable day on the slopes tomorrow. I’m joined here by [...]

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A Used Vehicle Challenge: Increasing Your Share Of Subprime Deals


In 2014, CarMax started using its own finance company to book deals from subprime customers, rather than work the deals through other lenders. During a recent quarterly conference call, company executives say they haven’t seen “anything negative” from the in-house subprime financing test, and they expect it to continue as planned. The CarMax effort is [...]

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An Opportunity To Rekindle A Lost Love, And Live A Dream


For at least the last 15 years, I’ve had a recurring dream. In the dream, I’m flying down a steep mountain slope, my skis cutting picture-perfect arcs in fresh powder. It’s just me, the mountain and a rush of adrenaline as I go faster and faster. Then I wake up. The feeling of euphoria fades [...]

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