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Subprime financing on the rise in new car sales, leasing too

We all remember the financial crisis that began several years back. At its core was a splurge of subprime lending for housing loans. The housing bubble burst, triggering a collapse of the mortgage-backed securities market. Apparently, those types of loans still exist in the automotive industry, and the market share for these types of "nonprime, subprime, and deep subprime," loans has grown 13.6 percent compared to the third quarter a year ago.
According to an Automotive News report, high-risk lending expanded to 24.8 percent of total loans in Q3, up from 21.9 percent for this time last year. As this level increased, average credit scores of borrowers dropped to 755, down from 763 a year ago. In that time, the average financing amount increased $90 per vehicle, to $25,963.
At 818, Volvo maintains the highest per-owner credit score, while Mitsubishi has the lowest, at 694. The highest rate of borrowers was at Toyota, with 14 percent of the market, followed by Ford with 13.1 percent and Chevrolet at 11.1.

Performance cars overpower the Detroit Auto Show

At precisely the stroke of noon on Monday, the 2016 Acura NSX rolled on stage at the Detroit Auto Show amid plumes of smoke and dancing lights. The sounds of the powerful engine revving soared to the rafters. It was the second coming of Acura's iconic sports car, and the reveal had all of the expected trappings. Afterwards, champagne corks popped and the bubbly flowed. It was noon in Detroit, but for the green-car movement, it seemed like the clock had struck midnight. That's an exaggeration, but performance was the overwhelming theme of North America's most important show. Ford – which has helped lead the way in smaller displacement engines and early adoption of hybrid powertrains – had more than 1,500 horsepower on stage one point after it revealed the GT concept, the new F-150 Raptor and the Shelby Mustang GT350R. The NSX is technically a hybrid (it has three electric motors), but with 550-plus hp, there's no doubt this Acura was bred on the track. The theme continued throughout the show at nearly every stand. Alfa Romeo showed off the 4C Spider, which is the open-air version of a car that purports to be the spiritual successor of the high-performance 33 Stradale from 1967. On Tuesday, Cadillac is scheduled to reveal the 640-hp CTS-V with the V8 transplanted from the Corvette Z06, and the Lexus was expected to roll out its own V8-powered beast, the 467-hp GS F. For enthusiasts – especially enthusiasts with money – these are halcyon days. But make no mistake, all of this power has a purpose. Ford product chief Raj Nair said the Blue Oval uses high performance cars to develop technologies, like aerodynamics and materials, which are then shared across its lineup. "It's another proof point about how serious we are in developing innovation through performance," he said. Ford, which is rolling out at least 12 performance cars by 2020, said the sporty cars attract younger and more influential buyers to its fold, which can help burnish its image beyond adding sales volume. Toyota is taking a similar approach, senior vice president Bob Carter said, noting the Lexus RC coupe draws people into showrooms and gets them excited about the brand, even if they don't end up buying one. "They provide an aspiration and a halo that provides the attention that gets you noticed in a cluttered market," he said.

Seventies super-salesman challenges new car-sales record

Some of the fondest memories from my youth were the Sunday afternoons spent walking between rows of new and used cars. This preceded the advent of widely available internet, so the cars didn't sell themselves online: A tentative buyer had to come see the cars in the metal, with old-school salesmen taking well-earned smoke breaks after putting someone behind the wheel of a new Saab 900. All-inclusive subscription services were unheard of. If you open a Guinness records book and look up car salesmen, you'll find Joe Girard. The definitely old-school Detroit salesman regularly sold over 1,000 new cars per year, with a particular high point of 1,425 cars in 1973 guaranteeing him a mention in the Guinness book. To reach that kind of sales figure, you had to be a pretty special salesman, and Girard was. He didn't take breaks unless absolutely necessary, and even his lunch hours were dedicated to selling more cars instead of shooting the breeze with other sales persons. By 1977 he was worn through, having sold over 13,000 cars in his career, and his physique couldn't take it anymore. He's been a motivational speaker since. Now, 44 years later, a Dearborn, Mich., Cadillac and Chevrolet salesman named Ali Reda has reportedly broken Girard's record. The books at Les Stanford Chevrolet Cadillac say Reda sold 1,530 new cars and 52 used cars in 2017, averaging 130 vehicles per month. But after Girard, 89, heard of the sales record, he called his attorney, not letting his record be broken without a fight — or at least an audit. The Dearborn dealer isn't too concerned about Girard's doubts, at least according to Gary Stanford, whose father founded the dealership. "It's very official, trust me," said Stanford to the Detroit Free Press. "Ali is the hardest worker I've ever seen. And if someone doesn't believe the data, well, they're more than welcome to consult with GM. It's all there in black and white." What Girard doesn't get is that Reda was honoring him with the accomplishment. "I read his book, 'How to Sell Anything to Anybody,' and it said it would teach you how to become the best," said Reda, who at age 44 was a newborn when Girard hit his peak. "He's an absolute legend in the industry. Your whole career, you're chasing his name.