Full text of G.20 Sales Finance Companies : June 8, 1951

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BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
June 8, 1951
SALES FINANCE COMPANIES
APRIL 1951
"^financing—Sales finance company purchases of retail automotive paper continued
to expand in April, although the month-to-month increase of 3 per cent was much below that reported in March. The month1 s increased volume was accounted for entirely by moderate increases
in the financing of used vehicles, since new vehicle financing showed a decrease in April.
Generally in the past, new and used automotive financing have moved in the same direction. The
divergent movements in April probably reflect a reported month-to-month decline in new-car sales
and a month-to-month increase in used-car sales.
Retail automotive balances outstanding on April 30 were unchanged from the level of
the preceding month-end. This indicates that the overall gain in automotive financing activities
during April, following the large expansion in volume during March, was sufficient to bring new
acquisitions to a level equal to repayments on automotive paper. As a consequence, the decline
in outstandings which has continued since last October was interrupted.
Retail financing of other consumer goods was down $ per cent in April, after having
increased sharply in the previous month. This reflected, principally, a decline of 16 per cent
in the financing of furniture, radios, and musical instruments and a k per cent decline in the
financing of refrigerators and other household appliances. Increased volume was reported for
the other two classes of paper.
As in the past six months, April repayments on outstanding balances of other consumer
goods paper exceeded new acquisitions of paper, with the result that outstanding balances continued to decline in April. At the month-end, such balances were 3 per cent below the level of
March 31, 1951.
Retail Financing by Sales Finance Companies

Class of retail paper
Automotive:

Total retail

Commercial cars: New
Used
Other consumer goods:

- 3
+ 6
+
+

h
8

+ 3
t +

New
Used

Ll

- h
+ 9
- 3

Total

Furniture, radios, musical instruments
Refrigerators and other household appliances
Residential building repair and modernization
Miscellaneous retail

__0

H CO

Passenger cars:

Percentage change, March 1951 to April 1951
Outstanding balances
Volume of paper
Number
end of month
acquired during month
of cars

-16
- h
+13
+ 1

Wholesale financing—Wholesale automotive paper purchased showed a moderate decrease in
April, a month during which a contraction in volume is usual. This decline, however, was from
the unusually high level of March, and did not bring new acquisitions below the level of repayments. Consequently, wholesale automotive outstanding balances increased moderately in April.
Wholesale financing of goods other than automobiles declined sharply in April from the
very high level reached in March. Despite the sharp decline in April volume, outstanding balances
of this class of paper continued to increase, although at a rate considerably slower than in
recent months.
NOTE.—April data, based on returns from 117 sales finance companies, are compiled
in the same manner as those shown in earlier reports. Aggregates represent only the totals for
the reporting companies and, since the reporting sample is not identical from month to month,

they are not comparable with totals of preceding months.


Page 2
SALES FINANCE COMPANIES

Table 1 A u t o m o t i v e and Diversified Financing by Sales Finance Companies
Indexes of Outstanding Balances: December 31, 1939 • 100 a/

End of month
and year

Total
all
sales
financing

1939
191*0
w

100
136
152
53
20
18
22
59
119

191*2

191*3
191*1*
191*5
191*6
191*7
191*8
191*9
1950

Wholesale
automotive

Wholesale
other
than
automotive

100
132
lk9
37
13
15
18
U2
88

100
169
175
112
1*0
21*
27
90
163

100
11*0
250
1*0
8
11
38
221*
391*

100
129
11*8
76
30
26
39
105
226

100
131
11*7
61
27
26
23
59
89

a

516

w
177

130

Retail
automotive

Retail
other
consumers'
goods

Industrial,
commercial,
and farm
equipment

«

$ 8

I S

291

325

296

21*0
250
263
266
27U
282
288
291
291

27k
284
298
31U
322
330
331
328
325

186
202
228
163
179
192
21*0
280
296

537
537
1*99
1*36
1*21*
1*22
1*35
1*78
516

172
171*
179
185
189
192
188
182
177

112
117
120
123
121*
127
128
132
130

287
286
290
29b

320
315
312
311

291
306
356
382

61*8
759
906
91*3

171
166
161
156

132
13U
125
136

Indexes as of December 31 for the years of 1939, 1940, and 1941 are based on figures reported by
sales finance companies on a supplementary report form which accompanied the regular monthly report form for January 1942. Succeeding indexes are derived by calculating the percentage
changes of the outstanding balances reported by sales finance companies for each month from
those reported by the same companies for the preceding month, and by linking these percentages
to the indexes for the preceding month.

Table 2.—Relative Importance of Loans Made by Sales Finance Companies
During April 1951
and Outstanding Balances at End of Month

Class of paper

Paper acquired
during month
Amount

Outstanding balances.
end of month

Percentage
of total

Amount

Percentage
of total

$938,261*,1*98

100

S3.6fli.7l8.388

100

81.8C9.178
22 ,211*,61*9
59,61*1*,529

9
3
6

21^,199,080
105,587,001*
109,612,076

6
3
3

856,1*05,320

91

3,439,519,308

94

Included in this classification are only those firms which, in addition to their sales financing
operations, reported loan activities.




Page 3
SALES FINANCE COMPANIES

Table 3.—Automotive and Diversified Financing by Sales Finance Companies
Paper Acquired During April 1951
and Balances Outstanding at End of Month
Volume of paper acquired
during April 1951*
Class of paper

By all
companies
reporting

By oomptni.e
reporting
outstanding,
bal.no.a a/

Ratio paper
acquired to
outstanding
balances ly

Outstanding
balance
April 30,
1951 a/

$274,974,868
538,649,495
19,059,878
Total wholesale - other than automotive...
Total retail - other consumers' goods..... 21,323,250
17,543,555
Industrial, commercial, and farm equipment

$271,948,348
535,420,775
18,251,851
18,963,533
17,163,691

$2,483,996,103
600,725,849
70,494,247
235,457,941
101,828,980

11
89
26
8
17

$871,551,046

$861,748,198

*3,492,503,420

25

Data are based on figures from sales finance companies able to report both their paper acquired and
their outstanding balances•
b/ Ratios obtained by dividing paper acquired (column 2) by outstanding balances (column 3).
Table 4,—Number of Cars Financed and Volume of Paper Acquired
by Sales Finance Companies During April 1951
Number of cars
Class of paper

New cars (passenger and commercial)..
Used cars (passenger and commercial).

Paper acquired

Number

Percentage
of total

Dollar
volume

284.960

100

$267,579,621 V

100

79,199
11,872
180,542
13,347

28
4
63
5

107,728,345
17,214,357
132,986,707
9,650,212

40
6
50
4

330.521

100

$531,420,012 y

100

291,085
39,436

88
12

493,769,443
37,650,569

93
7

Percentage
of total

Data are based on reports from sales finance companies providing a breakdown of their retail and
wholesale automotive financing. These amounts are less than those reported in table 3 due to the
exclusion of some data for which breakdowns were not available.

Table 5,—Volume of Diversified Sales Financing During April 1951

Class of paper
Retail - other consumers* goods:
Furniture, radios, pianos, and other musical instruments..

Dollar volume
of paper acquired

Percentage
of total

$ 5,162,687
6,220,985
2,733,581
6,153,150

9
11
5
11

$20,270,403 a/
19,059,878
17,543,555

36
33
31

$56,873,836

100

~TJ Data are based on reports from sales finance companies providing a breakdown of their retail
financing of other consumers' goods. This amount is less than that reported in table 3 due to the
exclusion of some data for which breakdowns were not available.