News

It’s been a turbulent last few years for rental operations to say the least. While the industry weathered an unprecedented supply crisis — and enjoyed record profits as a result — we may finally be seeing the light at the end of this long tunnel. Yet we’re now in a whole new environment with new challenges and demands.

To gauge how the industry overall fared and is moving forward, Auto Rental News caught up with various experts in the space. Here’s what they said about vehicle availability and sales, the path to electrification, incorporating technology and telematics, the changing customer experience, new business models, and more.

NORCROSS, Ga.—January 3, 2023— APCO Holdings, LLC (“APCO”), a leading provider and administrator of automotive Finance & Insurance (“F&I”) products and home to the EasyCare and GWC Warranty brands, has acquired National Auto Care (“NAC”).

NAC is a highly respected provider of F&I products, administration, consulting services, training, and marketing support. With more than 35 years of demonstrated success, NAC provides products and services to thousands of auto, RV, and powersports dealers, credit unions and financial institutions.

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) and the New York State Office of the Attorney General sued a predatory auto lender, Credit Acceptance Corporation, for misrepresenting the cost of credit and tricking its customers into high-cost loans on used cars. The car-buying experience turns into a nightmare for many of Credit Acceptance’s borrowers, who face unaffordable monthly payments, vehicle repossessions, and debt collection lawsuits. The joint complaint alleges that, among other things, Credit Acceptance hides costs in loan agreements and sets consumers up to fail. The complaint also alleges that Credit Acceptance violated New York usury limits and other consumer and investor protection laws. The lawsuit seeks to force Credit Acceptance to stop its illegal practices, reimburse harmed consumers, pay back wrongfully earned gains, and pay a penalty.

WASHINGTON — The Internal Revenue Service today issued the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.                               

Beginning on Jan. 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 

• 5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.

• 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, consistent with the increased midyear rate set for the second half of 2022.

• 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022. 

In today’s market, the deterioration of consumer credit, and auto loan performance, in particular, is a worrying sign for industry watchers. In the context of high inflation and with the Fed intent on slowing the economy and weakening the labor market, there are indeed clear signs of stress in the system. Continued jobless claims are increasing, up from their historic lows. Auto loan delinquencies are also continuing to rise, and auto loan defaults are growing as well. As a result, repossessions are also increasing, but they too are rising from record lows. Through any economic cycle, increases in defaults and repossessions are a normal, expected occurrence.

On October 22, 2022, the Federal Trade Commission announced it is seeking public comments on whether it should explore a rule regarding the harms caused by junk fees and the unfair or deceptive tactics companies use to impose them. Junk fees are unnecessary, unavoidable, or surprise charges that inflate costs while adding little to no value for consumers. The notice announcing this initiative was published in the Federal Register on November 8.

At the request of interested persons, the Commission has extended the public comment period until February 8, 2023. Information about how to submit comments can be found in the Federal Register notice.

The auto sector is one of the victims of the aggressive interest rate hikes by the Federal Reserve to crush inflation, which is at its highest in 40 years. 

According to experts, this monetary policy has increased the cost of credit, and more particularly, the cost of car loans. Rising interest rates will make consumers reevaluate their decisions before quickly jumping into a car loan, experts at Edmunds.com recently warned.

"Interest rates for new and used vehicles are skyrocketing", the research firm found.

The economy is currently in a critical state, despite the efforts of the current administration to downplay it. In July, severe mortgage delinquencies increased 55 percent over pre-pandemic levels. Meanwhile, foreclosures grew 12 percent in August from July 2022 and increased 187 percent from 2021, according to data from ATTOM. To make matters worse, foreclosure filings have continued to rise each month since this summer. Additionally, 32 percent of American consumers are having trouble paying their bills. Furthermore, the growth in real average hourly earning isn’t keeping up with inflation, pushing households to borrow more.

Automobile shoppers say retailers’ transparency is a critical part of building and maintaining trust in the sales and service process, according to a recent survey commissioned by AutoAp Inc. and Rapid Recon.

“Consumer Transparency Expectations" found that consumers still trust automobile dealerships -- new car dealers scored 80% when consumers were asked to rate trust, while transparency rated 92%, with 100% being extremely important.

We’ve used cars for quite some time now, and they’ve become a very accessible commodity. Brands like BMW, Jeep, Mercedez, and many more produce high-quality vehicles with unique features, not to mention electric and hybrid rides that are said to be the future transportation of choice. 

However, just some 200 years back, such things were unimaginable to a regular person, and the early prototypes, though impressive for that time, didn’t manage to find their niche. It’s amusing to think that horse carriages were still more cost-effective in those days. 

CENTREVILLE, Va. (Dec. 6, 2022) – The CARFAX database, the largest vehicle history database in the world, now includes more than 30 billion records, the company announced today. CARFAX data is a resource that helps millions of people shop, buy, service, and sell used cars more confidently. This milestone came from one of the more than 131,000 sources that report vehicle information directly to CARFAX.

CARFAX was founded in 1984 to combat odometer fraud. It took more than 15 years for the company to reach 1 billion records. CARFAX has continued its relentless pursuit of data, and the company now loads a billion records about every 5 months. 

Next year could be the light at the end of the tunnel for the chip shortage that slashed vehicle inventory for the past two years — and that could mean good news for weary car buyers.

The chip shortage has pummeled the global auto industry for years, depressing dealership inventory levels and driving up new and used vehicle prices. But experts from AutoForecast Solutions say that by the end of 2022, the semiconductor shortage won't be nearly as bad as it was last year. Better yet, 2023 could look even rosier.

On December 1, 2022, nationwide used car dealer CarMax Auto Superstores, Inc. (“CarMax”) and 36 state attorneys general announced a $1 million multistate settlement that will require CarMax to disclose open recalls related to the safety of its used vehicles before consumers purchase them. The settlement resolves an investigation into CarMax’s advertising and sales practices related to vehicle recalls since 2014.

The AICPA passed a new credit loss measurement standard (called “CECL”) which requires your implementation effective January 1, 2023, for BHPH operators who carry financial instruments (receivables). The new requirement was issued in Accounting Standards Update 2016 – 13 – Financial Instruments – Credit Losses (Topic 326) and its initial implementation was deferred until 2023. This new standard applies whether the financial instruments (like BHPH installment contracts) and lease receivables are carried on or off the balance sheet. Under current accounting standards (GAAP),

The Federal Trade Commission joined the Consumer Financial Protection Bureau (CFPB) in filing an amicus brief with the U.S. Court of Appeals for the Eleventh Circuit in the case of Louis v. Bluegreen Vacations Unlimited, Inc. The brief asks the appeals court to overturn a lower court decision that denied servicemembers the right to sue to invalidate a contract that they allege violates the Military Lending Act.

Interest-rate hikes from the Federal Reserve are raising average monthly car payments despite falling prices for used cars, according to a study.

The average monthly payment for used cars is 47% higher this year, hitting $551 a month, as compared to 2019, according to analysts at Cox Automotive, a platform that facilitates faster vehicle transactions.

The firm expects monthly car tabs to keep increasing, touching $570 by the end of the year, with the trend continuing in 2023.

By now almost everyone knows that the auto industry is still short semiconductor chips, although the situation seems to be improving. While it’s pretty much a given that electric vehicles use more semiconductors, why do gasoline-powered internal combustion engine (ICE) vehicles use so many chips? And do these chips have attributes that make it harder to crank up the manufacturing capacity when they are in short supply? That’s what this article will try to explain.

The Federal Trade Commission today announced it is extending by six months the deadline for companies to comply with some of the changes the agency implemented to strengthen the data security safeguards financial institutions must put in place to protect their customers’ personal information. The deadline for complying with some of the updated requirements of the Safeguards Rule is now June 9, 2023.

The Safeguards Rule requires non-banking financial institutions, such as mortgage brokers, motor vehicle dealers, and payday lenders, to develop, implement, and maintain a comprehensive security program to keep their customers’ information safe.

Subprime auto loan borrowers are increasingly falling behind on payments, and the value of used cars is dropping, two trends that are clobbering bonds tied to the debt.

Yields on some of the riskiest such bonds have jumped to about 6.5 percentage points more than Treasuries as of last week, a risk premium that’s widened up about 2 percentage points from the end of September, according to data compiled by JPMorgan Chase & Co. Excluding a few weeks during the pandemic, current levels are the widest since 2010.