Numlock Sunday: Ben Eisen on the red-hot business of auto loans
By Walt Hickey
Welcome to the Numlock Sunday edition.
This week, I spoke to Ben Eisen who wrote Car Dealerships Don’t Want Your Cash—They Want to Give You a Loan for The Wall Street Journal. Here's what I wrote about it:
Many automobile dealers aren’t really in the automobile business; they’re in the auto financing business. Cash buyers are being told that their business isn’t welcome, or if they do want to do it they can reap significant savings by going with dealer-organized financing and then just paying the balance owed in full sometime after the ink dries. That’s because financing is a massive source of revenue for the dealerships: In 2021, the average dealer profit from a new vehicle sale was $1,236 from the financing and insurance part of the business alone, up from $483 per vehicle in 2005. Last year lenders extended $734 billion in auto loans, a new record, and 55 percent of buyers did dealer-arranged financing, also a record since 2005.
This topic has been low-key, but endlessl…