Car loans are not only more expensive now, but they're harder to get as lenders get pickier.
CarMax Inc. signaled that higher interest rates at the Fed have started trickling down into the realm of car buying, as the used vehicle seller added tightening lending standards to a list of headwinds its business faces.
Not only are banks and other lenders raising interest rates on loans to keep pace with benchmark-rate hikes by the U.S. Federal Reserve, they’re also getting more selective to protect against potential loan losses and setting aside more capital for reserves on their balance sheets. Its lending business, CarMax Auto Finance, reported a 36% drop in income to $123.9 million due to compression in the net interest margin, as its cost of capital for car loans rose more quickly than the interest payments it collected. The company also booked a higher provision for loan losses, which eats into net interest margin as well.
“Recent bank failures have added to the risks of a recession this year primarily as a result of banks pulling back on lending related to heightened regulatory scrutiny and potential regulatory fallout,” Keefe, Bruyette & Woods analysts said in a research note on Monday. “There is a growing concern that the recent bank failures could put pressure on the U.S. economy as banks tightened their lending conditions to ensure a healthy balance sheet.
Norge Siste Nytt, Norge Overskrifter
Similar News:Du kan også lese nyheter som ligner på denne som vi har samlet inn fra andre nyhetskilder.
CarMax stock rallies after big profit beat, even as revenue fell well short of expectationsShares of CarMax Inc. rallied 4.0% in premarket trading Tuesday, after the used car seller reported fiscal fourth-quarter profit that was more than double...
Les mer »
CarMax speeds past quarterly profit estimates on cost cutsCarMax Inc on Tuesday posted fourth-quarter profit above analysts' estimates as cost cutting measures helped the pre-owned car retailer soften the blow from a slowdown in demand for vehicles.
Les mer »
Fire department in Mass. smashes car windows to run hose through car blocking fire hydrantIt’s not something that happens often, but it is illegal and the person was also ticketed.
Les mer »
Sprint car driver Justin Owen, 26, dies after car crash in Indiana raceOwen’s car struck the outside wall and flipped several times in a qualifying race Saturday night for the AMSOIL Sprint Car National Championship at Lawrenceburg Speedway, where he was the reigning track champion, the U.S. Auto Club said.
Les mer »
Sprint car driver Justin Owen, 26, dies after car crash in Indiana raceOwen’s car struck the outside wall and flipped several times in a qualifying race Saturday night for the AMSOIL Sprint Car National Championship at Lawrenceburg Speedway, where he was the reigning track champion, the U.S. Auto Club said.
Les mer »
Hold on tight to your gas-powered carHooray for electric vehicles. Someday, they’re going to help slash carbon emissions and get global warming under control. Getting there, however, is not likely to be an effortless glide on gleaming blacktop.
Les mer »