Owners conducting an Automotive Property Refinance are often surprised to discover how many new attractive loan programs that have become available within the last 3 years. 30 year amortization periods, stated income and cash out refinance up to 75% LTV are now on the market.

However, automotive refinances are still heavily scrutinized by lenders that are concerned with the environmental status of the property. In addition, the special use nature, as well as the high level of seller financing (land contracts) further complicate and make lenders cautious.

Underwriting criteria is broken down into a few main categories – Loan to value, debt service coverage ratios, property analysis, tenant evaluation and credit worthiness of the borrower.

LTV – CLTV

Loan to value restrictions on automotive refinances are typically capped at 70% on rate and term and 65% on cash out refinances. However, there are a few lenders that will now allow up to 75% on a cash out basis. Lenders also will permit high leverage with seller held financing (sits in second lien position). The combined loan to value can be as high as 90%. For example, if the current first lien position existing convention loan is at 40% loan to value and the seller held is at 30% loan to value the owner could pull an additional 20% equity out on a cash out refinance (40% + 30% + 20% =90% CLTV).

DSCR

Debt Service Coverage Ratio restrictions are typically conservative at 1:1.3 for this building type. Meaning that for every $1.30 of net income (income after taxes, insurance, repairs, etc) the property/business produces, the mortgage payment will not be allowed to exceed $1.00. Said in another way, after all expenses and the mortgage have been paid, the owner needs to net $.30 to qualify.

Due to the cash nature of this business, stated income loans, (where borrower does not have to provide tax returns) can be a solid option for owners that do not show enough net income to qualify for traditional loans. With this type of loan the DSCR discussed above is not relevant.

Tenant Evaluation

In the case of investment automotive refinances, tenant evaluation is very important. Lenders may request tenant financials as well as borrower financials and scrutinize the time left on the current lease; among other relevant information. In addition, many lending source will only consider owner occupant transactions.

Property Analysis

Great caution will typically be used as market value and market rent is evaluated and compared to the subject property. Environmental status of the property will be examined and buildings constructed before 1997 will be further analyzed. Appearance, location, accessibility, and local market conditions, as well as other factors are considered.

Credit Worthiness

The personal credit worthiness of the borrower will be scrutinized. 680 credit score is normally the minimum for the best finance options. Exceptions can be made (on a limited basis) as some conventional lenders will consider scores as low as 640. The overall strength of the property, tenants, net worth, DSCR, and LTV can offset concerns of low credit scores.

Every potential automotive property refinance is unique and are considered on a case by case basis. However, the above can give you a good idea of what the capital sources look for when considering funding this type of commercial loan.

Isuzu Motors and Mitsubishi Corporation earlier announced the establishment of a joint venture called the Isuzu Automotive Europe GmbH (IAE). According to the automakers, the newly-founded system is aimed at expanding sales in Europe. This could be done by increasing the operational efficiency and strengthening the sales framework in the given territory.

IAE’s initial capitalization is 2.4 million euro or about 370 million yen. Isuzu and Mitsubishi will be both contributing 50 percent of the mentioned amount. The automakers have jointly deployed distributors in Benelux, Spain/Portugal, and Germany/Austria to set up sales channels. However, sales management and marketing for these markets will be carried out independently by different Isuzu companies and branches. Isuzu will be the supplier of light-duty trucks while Isuzu Operations Thailand Co., Ltd. will deliver pickup trucks.

The integration of the sales channels for light-duty trucks and pickup trucks will etch a remarkable milestone for the automakers. In view of the joint venture, Isuzu Operations Thailand and Isuzu will start to outsource IAE distributors’ management, market information collection, and new markets development. With the said venture existing, Isuzu and Mitsubishi expect to double the sales of light-duty trucks and pickup trucks in the European market from 16,000 units to 32,000 units in a span of three years.

Isuzu previously denied the rumor that it is asking General Motors to pull out of two joint ventures that produce diesel engines and replace the U.S. auto maker with a new partner, Toyota. “There is no discussion about this,” Isuzu spokesman Kouitsu Mabuchi said.

It can also be recalled that Nihon Keizai Shimbun business daily earlier reported Isuzu would ask former top shareholder GM to sell the 60 percent stakes it holds in DMAX Ltd. and Isuzu Motors Polska Sp. in Poland. The paper also reported Isuzu President Yoshinori Ida would propose the plan to GM Chief Executive Rick Wagoner. Eventually, the planned partnership of the automakers came into reality and the result was a powerful 6.6-liter V8 diesel engine. The latter was produced at DMAX and is mounted on the Chevrolet Silverado and GMC Sierra full-sized pickup trucks. On the other hand, the 1.7-liter engines in Poland were used to fuel several cars under the Opel brand.

The paper also added that Isuzu and Toyota would continue to supply GM. However, Toyota is planning to use the plants in the future to serve European and American auto demands as the market for diesel-powered vehicles expand.

Aside from joint ventures, Isuzu is also concentrating on producing state-of-the-art vehicles. It boasts of the i-Series pickup truck line that made its debut at the New York International Auto Show in 2005. The i-Series replaced Hombre, which has been out of production since 2000. i-Series, which shares same platform with GMs midsize pickups, is built at Shreveport plant in Louisiana. Said plant produces Chevrolet Colorado and GMC Canyon.

The automaker, which is famed for its quality California Isuzu auto body parts, is absorbed at boosting its i-Series sales. Since its introduction, up until February last year, Isuzu just sold 1,377 units of the i-Series. This information was divulged by Automotive News.

This year, Isuzu set forth 2 additional vehicles for the i-Series – the i-290 – 2.9 L Atlas LLV I4 and the i-370 – 3.7 L Atlas LLR I5. With the active ventures of the automaker, it is expected that the sales of i-Series and other Isuzu vehicles will be brought to the next level.

Is leasing a car, rather than purchasing a car on time payments a good thing or not. As with questions in life, it all depends on your financial and/ or automotive situation and as well who tells the story.

It is true that business can write off lease costs whereas that is not such an advantage to an individual car user. However this is not necessarily so. First it all depends on your situation and as well you’re negotiating skills. It is always better to be in an informed and prepared manner.

First of all leasing a car is downright attractive due to current low interest rates. Almost every month you will read in the popular news that the “Fed has cut interest rates again”. What this means to you is that in an overall sense that interest rates are less to you. This should mean lower leasing costs to you. If interest rates, in the banking industry and market are lower, so should be the interest rate basis in your lease negotiations and payments.

What are the advantages of leasing a vehicle? You will get a new vehicle to drive. When your leasing agreement term is over – then you hand the car in and walk away.

It may be debated that by leasing the car you will have no equity or asset accumulation left at this point in this automotive transaction. If you had bought the car, with payments, the car would be yours at some point, lock stock and barrel.

However major components and overall costs of running a car are maintenance costs. With a new vehicle – it is unlikely that you will incur these costs. First of all the car is new. Major repairs and costs are unlikely. In addition the car will come with a manufacturer’s warranty which should cover you for the majority if not all of the lease time period.

With modern, newer and especially smaller cars it seems that all repairs seem to be very expensive. After a certain point of time, use and mileage, it is not as if the car “nickel and dimes” you to death. Most of the innards of modern cars seem to be electronic in nature with advanced (read expensive and hard to fix) modules. There are few simple to repair mechanically based, non electronic component, cars. In addition for mechanics to work on cars now “everything is struggle’ “and as well spaces are tight and very hard to work within. In a summary the old “nickels and dimes” are now “five hundreds, thousands and several thousands”. With a leased car arrangement you may not own the car, with its equity. Neither do you have repair costs and heartaches. In addition you have a reliable vehicle to get you to work or to chauffer around your family.

There are several terms and factors to be knowledgeable about in your calculations and comparisons for auto purchase versus lease workup and lease negotiations.

First of all research the leasing tax rules in your jurisdictions. For example in your state you may well only pay sales taxes on monthly payments, not on the cost of the vehicle. It all depends on the negotiations of your payments- which involve the time frame and value of the car at the take back time end of lease.

Next what are the fees? For example the fee at the end of turn in, paperwork fees and fees for “excess miles”. Are these negotiatiable? In the case of the “excess mileage” and “excess mileage fees” are these carved in stone or can the allotment or rates charged be reduced? In the case of the “turn in” fee. If you offer to increase your monthly payment – often this fee will be reduced.

In order to best negotiate you will have to speak the same language and terms as the lease negotiator. Several terms to know, comprehend and understand are “Capitalized Cost”, “Money Factor” and “Residual Value”.

Simply put the cost of the leased vehicle is confusingly described as the “Capitalized Cost”. Just as you would haggle over the cost of buying a new car, you should not accept a stated price or manufacturers suggested retail price (M.S.R.P.) as the price paid.

Haggle and argue over the “Capitalized Cost” just as you would in any car or automotive deal.

Next in line in proper automotive leasing terms is the term “Money Factor”. “Money Factor “is the interest rate upon which the leasing calculations are based upon. The lower the number of the “Money Factor”, the better for you. As a rough guide and estimate multiply the “Money Factor” value by 2550 to get an estimate of the relevant interest rate.

Last in the line of leasing and leasing lingo is the term “Residual Value”. “Residual Value” is the amount that the car, S.U.V. or truck vehicle is said to be worth at the end of the lease period. Simply put, the more the vehicle is deemed to be worth, at this time period, the less will be your total amount due to be paid overall for your lease. Thus the higher the “Residual Value” at the end of your lease, the much lower will be your monthly lease payments.

In the end, your car purchase or lease decision will come down to two factors. Reliability of transportation and the total cash outlay from your personal pocketbook or wallet.

Vladimir Melnikoff asked:

Many of today’s carrier elections cannot have been possibly around the last mark, which you stepped into to car a Dealership. E.G. did you hear at all of a crossover carrier (CUV)? It is combined and a Truck CUVs good gas mile number received a new automobile category, those the advantages of a car and has the passenger and charge area of a SUV. Internet places of assembly such as AutoTrader.com have tendency in the middle with the newest industrial oh arranging to value-hold back including key information over crossovers, the alternative fuels and long-term. Automotive news.

You probably either to a new or used carrier, but think you knew are another choice there? Certified pre+possessed carriers (CPO) are used cars, which go through radical control, and come frequently with an agreement seal and a warranty of the original manufacturer or of the dealer. Again there is many web site, which the post leaders can simplify, to the process and support you, if them a new, used or certified pre+possessed carrier to preselect.

Now your research took place and you is ready to find a Dealership which has the exact car for you. Internet continues helping; with AutoTrader.com you can look for the Dealership, which is to you at the nähsten and uses a dynamic mapping system, to go in order to print out a diagram, if you are ready. Additionally you can look for those for dealers by the services, to you, as elections are important to financing whether the Dealership has a service center, and lender autousefulness.

Finally guarantee to thus take whole home working with you to you yours can to it refer, while you buy. Detailed carrier brochures and estimations of yours trade in print, which include the estimation of a third party of the value of your carrier. You have more confidence in the list price and in, which you accept for your present car these information knowing. In order to learn and an educated autobuyer become over this and other autobuying operational funds, www.AutoTrader.com visit.

Posted by Nikhil Gupta

Rain Stockton asked:

The head of Ford Motor Co.’s Volvo car unit refused to discuss if the brand could end up being sold as its parent company looks to refocus on its troubled North American business.

In an interview on the sidelines of an auto conference, the refusal by Volvo Car Corp. CEO Fredrik Arp follows news reports in Europe earlier this year that Ford briefly investigated the idea of selling the Swedish brand.

Ford announced earlier this month that it has retained financial advisors to be able to help it identify “the best way forward” for its Land Rover and Jaguar brands. These brands are part of the Ford Premier Automotive Group that lost almost $4.8 billion since 2004, despite several restructuring efforts.

Ford has attributed much of the declined sales to Jaguar but does not break out results from its individual European luxury brands. Swedish brand Volvo is also a portion of Premier Automotive Group.

Mr. Arp reasoned that he rejected the discussion and speculation because it is not in the interest of Volvo car stakeholders, customers, dealers or anybody else, and because he does not own the business. He explained at the Prague conference organized by the industry publication Automotive News Europe.

A Ford spokesman explained that the auto maker is not in discussions with any company with regard selling Volvo, which it bought in 1999 for almost $6.5 billion. Nonetheless, Mr. Arp continued that as they have consistently been saying since last year, Ford Motor Co. has been considering a number of strategic alternatives for all of their operations, just like any responsible doing of a business.

For $848 million, Ford sold Aston Martin brand in March. And until recently, the company had said that it was not interested in selling Land Rover and Jaguar. For $2.5 billion, Ford purchased the Jaguar passenger-car unit in 2000. But it has been forced to evaluate again its global business strategy as a result of big losses in North America, where high gasoline prices are dragging buyers away from Ford pickup trucks and sport-utility vehicles, while new entrants weaken the segments.

Last Tuesday, Mr. Arp said that Volvo’s global vehicle sales climbed 8 percent during the first five months of the year, and that he expects that the brand will set a new record for unit sales this year. With quality Volvo brakes, Volvo cars reached between 430,000 and 450,000 units of sales every year. Such sales figures are far fewer than competitors such as BMW AG and DaimlerChrysler’s Mercedes unit – each of which sells more than a million vehicles every year.

As regards Volvo’s financial performance over the years as compared with the other brands in Ford’s premium group, the company officials have generally indicated greater satisfaction. Some industry analysts have speculated that Volvo would be easier to sell than Jaguar or Land Rover due to its initiatives in various safety features.

Posted by Nikhil Gupta

Robert Burko asked:


Email marketing solutions can help your car dealership enhance the number of vehicles that come in for service. Keeping consistent numbers is all well and good, but everyone knows having increasing monthly numbers is better. Email marketing solutions track the campaigns you send out so that you get real time data on the customers who are interested in the promotions you offer them regarding your service centre.

By reminding your customer to bring their cars in for service, you have the opportunity to multiply the amount of vehicles coming in for service. More vehicles for service means higher numbers in sales.

So, how do email marketing solutions help you bring more cars to your service center? Simple, all your customers really need is a reminder: “Hey you know that asset of yours that you paid thousands of dollars for? You need to make sure it’s in tip top shape, and it will only cost you $50.”

Your computer database most likely lists all of your clients’ contact information, such as how many times they have visited, and when their vehicle is due for service. This is vital information for you to use when creating a campaign through email marketing solutions.

You can also use the “number of visits” and the “vehicles due for service” categories, to help you segment your email marketing solutions campaigns into frequent users, sometime users, and seldom users.

Now you are ready to create three different marketing campaigns, for three different target customer groups, while reminding them all how important their investment is to them.

Once you have created your campaigns, the magic happens. Email marketing solutions are equipped to track how many people have opened your email, if they have clicked on the promotions, or if they have sent your email on to friends or family.

The data gets even more in depth than that. You can know exactly who opened the email you sent, who clicked on each link within the email, on what day, and at what time. These insights can help you further segment your email marketing solutions campaign. As an example, let’s say that you are tracking those that “frequently” bring their cars in to your service center: 50% are clicking on their “$10 off preferred customer” promotion on the weekends; and the other 50% are opening and clicking on their emails from Monday to Friday.

You now have two more customer groups to better target your audience: weekend readers and weekday readers. You can then split your future email marketing campaigns into 2, so that your emails arrive into your customers’ inboxes exactly when they’re most likely to read it.

You will also be able to grow your list with a “forward to friends” button that is available on most email marketing solutions. For those customers that are constantly forwarding your email (we love these guys) you can show your appreciation by segmenting yet again.

You can offer them a special promotion for forwarding your email. This will keep them in the business of continuing to spread the good word about your service center.

It’s really easy to take “tracked” information and turn it into another campaign. Email marketing solutions are very user-friendly, so the tracking feature of most email marketing solutions gives you the option to export the data found within any given field.

Email marketing solutions will bring more people to your automotive dealership service center by providing you with the information you need to segment and target your customers. Catering to your audience’s exact needs will bring more of them to your service center and provide you with a better opportunity to grow your sales per month.



Posted by Nikhil Gupta

Matthew C. Keegan asked:


Separately, A New Compact For Chevrolet

It looks like badge engineering is alive and well with General Motors as Automotive News is reporting that the Pontiac Wave, currently only available in markets outside of the US (including Canada), will soon be coming stateside.

Based on the GM-Daewoo platform vehicle now being sold as the Chevrolet Aveo, the Pontiac G3 (as it is expected to be called here) will be available for sale later this year. In addition, a new five-door Aveo will hit Chevy showrooms next month.

GM seems to want to improve its fuel economy numbers for its Buick-Pontiac-GMC dealerships by offering the G3. At present, the Pontiac Vibe is the most economical offering available and the G3 is expected to offer similar fuel economy numbers.

For 2009, the Vibe is expected to return EPA fuel numbers of 26 city and 32 highway while the G3 has EPA fuel numbers of 25 and 34 respectively.

A New Compact For Chevrolet

Automotive News (subscription required) is also reporting that a new Chevrolet compact will be built at the company’s Lordstown, OH plant beginning early next year. The yet unnamed vehicle is expected to be built on the company’s Delta platform, which previously powered the Saturn ION and currently underpins the Chevrolet Cobalt and the Pontiac G5. The car is expected to be introduced at an auto show later this year (L.A. in November?); there is no word yet on the fate of the Cobalt.

Honda, Toyota Tooling Up

Honda is reporting that they may ratchet up production at the two North American plants which produce the Civic to keep up with demand. Auto Spies says that sales of the Civic are up 28.4% for the year and that worker overtime could help bring more cars to the market.

Toyota is reportedly in talks with General Motors about building its Prius hybrid at the jointly owned NUMMI factory in California. Currently, the Pontiac Vibe and Toyota Matrix along with two other models are built at the plant, but Toyota is considering establishing a U.S. presence for the Prius. The Prius is being built at factories in Japan and China, but Toyota has been looking for a way to boost annual hybrid production to 1,000,000 models annually.



Posted by Nikhil Gupta

Samantha McCartney asked:


If you have chosen to begin your own automotive auto body franchise, you have made a great choice! The market is definitely there since there were 220 million vehicles on U.S. roads in 2003, a figure that had been growing steadily at approximately 5% per year. We can use this figure to project that there will be more than 275 million vehicles on the road in 2008. More vehicles means a larger market, and an increased number of minor accidents as streets and parking lots become more crowded. Therefore there will be many more people coming to visit you at your new automotive auto body franchise!

Know your stuff! This is the first thing you should do. You need to know about what you are trying to sell. If you do not know about your services in detail why should I let you touch my car? It is important you know as much as you can about the business you are promoting. If you know a lot and can present that to your customers they will be more apt to give you business. It is also important to know what you offer so that you can actually offer it to people that you meet elsewhere. This will help promote your business.

You want to provide the best service possible to your clients with automotive auto body needs. Needing a repair to car is stressful enough, don’t add to their stress. Make your customers feel valuable! Make sure you make the process simple and painless for them. Also, keep them informed with the truth of their car repairs and the expense it will incur to them. Try to have their car fixed and ready to go as soon as possible. It is hard to be without a car or to pay for a rental, so the customer will really appreciate a very timely return of their car. Also, word of mouth will be a big form of promotion for your automotive auto body franchise. Make sure the words are good. People talk when things are good, but they talk a lot more when things are not in their favor. So it is important to keep your customers happy and talking about the good all the time!

Find qualified professionals to work at your automotive auto body shop. You will want to best of the best to be working for and with you. You want to make sure that you are providing your customers with best! If you have an employee who is not qualified they may cause more damage than they can repair!

Also follow the system that is place from your franchisor. They have been doing it longer than you and have had the chance to get it right, so if you want to be successful follow the examples you receive. Many franchisors offer training that can be valuable for you and your employees. Make sure you take advantage of the existing programs offered by your franchisor.

Keep your automotive auto body franchise going strong with these tips for success!



Posted by Nikhil Gupta