Full text of G.20 Sales Finance Companies : March 11, 1948
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. ,. ( I ' BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM March 11, 1948 0.20 SALES FINANCE COMPANIES JANUARY 1948 Retail financing.--The volume of automotive and other retail financing dropped in January after showing strong gains in the preceding month. The declines in volume from the December levels of activity were largely seasonal, and were accompanied by further increases in balances outstanding. The drop of 5 per cent in total automotive paper acquired shown in the table below reflected a reduced volume of financing for all types of vehicles. Financing of used vehicles registered the largest percentage decline. The decrease in the financing of new vehicles was much less pronounced than the fall in motor vehicle output in January. > Financing of consumers• goods other than automotive also showed declines in all classes of paper and the total was down 26 per cent. Repair and modernization financing continued to fall off, reflecting in part a reduction in activity of this type during the winter months. Other classes of non-automotive financing declined sharply in January following considerable increases in volume in December. Retail Financing by Sales Finance Companies Class of retail instalment paper Automotive: Total retail Passenger cars: .. Colllllercial cars: -7 New Used -3 New Used Other consumers• goods: Percentage change. December 1947 to January 1948 Volume of paper Outstanding balances 1 Number of cars acauired durine: month end of month ~ I~ - 2 .!2 .... -8 - 7 -9 -9 - 5 -12 .... -26 +l -34 -25 -34 - 6 .. Total Furniture, radios, musical instruments Refrigerators and other household appliances Residential bu3lding repair and modernization Miscellaneous retail . =.2 .. .... Wholesale financing.--The January volume of wholesale automotive financing was less than in December as a result of a substantial drop in sales to dealers of new vehicles. Sales to dealers of used vehicles, however, increased somewhat over the volume of the preceding month. Non-automtive wholesale financing also declined in January. Despite the drops in paper acquired during the month, balances outstanding on both automotive and non-automotive wholesale credit continued to rise. Ratio of paper acquired to balances outstanding,-The ratio of paper purchased during the month to balances outstanding at the end of the month decreased 4 percentage points to 34 for January. Note.--January data, based on returns from 136 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 FiliA:NCE COIIPA:NIES Table 1.--Automotive and Diveraified Financing by Sales Finance ComJaniea Indexea of Outatanding Balance•• December 31, 1939 • 100 !( Total Ret aU all automotive aalea financing End of month and year Wholeaale autanotive Wholaaale other than automotive Retail other consumers• goode Industrial, commercial, and farm equipment 1939. I I I I I I I I I I I I I I It I 100 100 100 100 100 100 1940. I I I I I I I I I I I I I I I I I 1.36 132 169 140 129 131 1941. I I I I I I I I I I I I I I I I I 1$2 149 17S 2$0 148 147 1942 ••••••..•••••••••• S3 37 112 40 76 61 1943. I I I t I I 11111 t 1 I I 20 13 40 8 30 27 1944 •••••••••••••••••• 18 1S 24 11 26 26 194$. I I I I I I I 22 18 27 38 39 23 I I I I I I I I S9 42 90 224 lOS S9 I II I I II 119 88 163 394 226 89 62 68 73 78 82 87 91 94 100 lOS 111 119 4S 48 9S 2S2 287 32S 110 116 124 136 14S lS7 168 180 192 206 218 226 60 61 68 67 70 7l 74 87 86 92 89 89 I I II I I I 19471 I I I It I I I I I I I I I I I I 1947-Januar,v •••••••••• February ••••••••• Karch •••••••••••• April ..••••••••.• J4q, • • • • • • • • •. • • • June, ••.•••.•• , •• Jul)' ••••••••• •••• A.ugu1t •••. ••••••• September •••••••• October •••••••••• November ••••••••• December ••••••••• S3 sa 62 66 69 72 7S 79 83 88 lOS 111 110 106 111 109 103 122 124 138 163 341 3Sl 346 336 333 321 310 359 394 ' ""• I I I I 1946. I~ I ,. 167 426 123 92 229 92 l948•J&nU&r1•••••••••• Indexee as of December 31 for the yeara of 1939, 1940, and 1941 are baaed on figures reported by aalea finance companiea on a supplementary report form which accompanied the regular monthly report form for January 1942, Succeeding indexu are derived by calculating the percentage change• of the outetanding balances reported by ealee finance companies for each month from those reported by the ume oompeniea for the preceding mnnth, and by linki·ng these percentages to the indexes ror the preceding month, !/ Table 2.--Relative Importance of Loaus Made by Sales Finance Companies During Januar1 1948 and Outstanding Balances at End of Month Clan of paper Paper acquired durin.: month Percentage Amount or total Outstanding balances, end of month Percentage Amount of total Total, all clanu of paper!( ....... , th79 6Sl 901 100 81.422.3S4.267 lOO Total lcana.,.,., ••••.,., .• •••, .•. ,, 2 3 6 142a22laJ2!i 78,723;277 67,268,047 10 Buaineea loan a, •. ..... , .•.•......• ~·688.67~ 1 ,212,09 29,476,S79 Total aalea financing !(.,,., ••••• ,, 43S,963,228 91 1,276,)62,943 90 Small (peraonal) loans, ••••••••••• s s !( Included in this classification are only those firms which, in addition to their sales financing operation•, reported loan activitiee, .. Page 3 • > SAU!:S FINANCE COKPANIES Table 3.-~utomoti .. and Di .. rsified Financing by Salea Finance Campaniea Paper Acquired During January 1948 and Balances Outstanding at End of Month Volume of paper acquired during January 1948 Clue of pttper I~ By companies By all compani.. reporting Outstanding balances January 31, Ratio paper acquired to out standi;, balances b 1948 !I reporting outatandi~J balances a Total retail automotive,,,,,,, •••••••••••• Total wholesale automotive,, •••••••••••••• Total wholesale- other than automotive,,, Total retail- other consumers• goods ••••• Industriel, commercial, and fare equipment $115,701,194 287,2$5,322 10,131,719 30,331,374 8,402,023 $114.~8,514 $ 649,093,611 233,361,288 32,033,368 340,838,514 69,991,922 18 123 32 9 12 Total sales financing ••••••••• ,, $451,821,632 $448,539,660 $1,325,318,703 34 285,899,025 10,121,638 30,191,652 8,278,831 !( Data are based on figures from sales finance companies able to report both their paper I" 1-- Table of ~rs Financed and Volume of Paper Acquired by Sales Finance Companies During Janua:i-y 1948 NUlllber of care Paper Percentage of total Total retail automotive •••••••••••••••• 108,547 100 $111,431,751 New passenger oara ••••••••••••••••••• oars •••••••••...••••• 41,644 7,680 54,883 4,340 38 7 51 4 54,396,545 11,648,895 41,617,795 3, 768,516 49 11 37 3 Total wholesale automotive,, ••••••••••• 202 1136 100 100 !;ew cars (passenger and commercial) .. Used cars (passenger and commercial), 177,747 24,389 88 12 t282z.:Mz7~5 ~ 255,940,014 26,407,721 Used camu~rcial Dollar volume acquired NUlllber llew commercial cars •• ,, ••• , ••••••••• , Used passenger cars •••••••••••••••••• ~ and 4.--~umber Class of paper I ac~uired their outstanding balances, ~ Ratios obtained by dividing paper acquired (column 2) by out£tanding balances (column 3), Percentage of total y 100 91 9 !( Data are based on reports from sales finance compNties 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 January 1948 Clau of paper . .... Retail - other consumers• goods: Furniture, radios, pianos, and other musical instruments,, Refrigerators and other household appliances, ••••••••••••• Residential building repairs and modernization, ••••••••••• Miscellaneous retail,, •...•.••..•• , •• ,,, •..••.•.••...•. , •• Total retail - other consumers• goods ..••••..•••.••..••.•••••• Total wholesale- other than automotive ••••••••••••••••••••••• Industrial, commercial, and farm equipment •••••••••••••••••••• Total diversified financing,,,,,,,,,,,,,,,,,,, of Dollar volume paper acquired $ 1,432,314 4,116,202 14,346,294 9,829,702 $29 '724,512 f!/ 10,131,719 Percentage of total 3 9 30 20 8,1~02,023 62 21 17 $48,258,254 100 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,