China in auto power play
It might not shake up the industry just yet, but China's interest in Volvo and Saab is the start of something big in global autos, writes columnist Wei Gu. Commentary
Capital One stops some auto inventory financing
DETROIT, Oct 10 (Reuters) - Capital One Financial Corp (COF.N) said on Friday it will stop financing vehicle inventory for auto dealers in the states of New York and New Jersey, starting November.
The decision comes at a time when the global credit crunch has put a squeeze on auto dealers, who face more expensive credit to finance consumer purchases as well as their own inventory amid a steep plunge in U.S. vehicle sales.
Capital One spokeswoman Tatiana Stead said that it was a business decision based on a variety of factors.
"It's only about vehicle inventory financing, and it's unrelated to other auto loans," she said.
Stand said the suspension of the vehicle inventory financing affects less than 20 dealers in the states of New York and New Jersey, adding that Capital One had made the decision earlier this year and told its dealers in August.
Dealers in Louisiana and Texas, where Capital One is active, will have continued access to the inventory financing, Stead said.
The finance arms of Ford Motor Co (F.N) and Chrysler LLC [CBS.UL] have already increased the rates on loans given to dealers to stock new cars.
Auto dealers have been spooked this year by the credit market squeeze, high gas prices and a slowing economy, which have combined to push U.S. auto sales to 15-year lows.
U.S. automakers severely curtailed their leasing programs and raised leasing rates in response to higher borrowing costs for their affiliated finance arms and tumbling residual values for light trucks and SUVs. (Reporting by Soyoung Kim; Editing by Tim Dobbyn)
