U.S. Auto Sales Fall In April: New-Car Supply Is Low, And Demand Remains High - Forbes

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Expect U.S. auto sales in April to fall around 20% vs. April 2021, due to low new-vehicle production, according to a couple of prominent forecasters.

In turn, analysts blame a computer chip shortage and other supply-chain problems for low new-vehicle inventory at dealerships.

According to the latest estimate from AutoForecast Solutions, the computer chip shortage could reduce North American auto production by more than 200,000 units this year.

Since January 2021, the chip shortage has cost North American auto production around 2.3 million cars and trucks, and potentially nearly 3.5 million, if lost production can’t be made up. AutoForecast Solutions is based in Chester Springs, Pa.

Record-high prices are the predictable result of low supply and high demand.

According to the online auto shopping site TrueCar Inc., the estimated average transaction price in April 2022 is $43,755, based on partial results for the month, up 14.7% vs. a year ago.

Also predictably, automakers have cut incentives. TrueCar said incentives as a percent of average transaction price were an estimated 3.4% in April, down from 8.5% a year ago.

In a forecast that was published April 27, TrueCar expects U.S. auto sales of about 1.2 million in April, down 21% vs. a year ago. In a separate forecast the same day, J.D. Power and LMC Automotive predicted similar numbers for April auto sales.

The April 2022 U.S. auto sales forecast looks worse, in contrast to a strong year-ago month in relative terms, before the chip shortage fully took hold, said Thomas King, president of the data and analytics division at J.D. Power.

Last year, dealerships had nearly 1.7 million cars and truck in inventory to sell, vs. fewer than 900,000 units in April 2022, King said.

David Smith, CEO of Sonic Automotive, Charlotte, N.C., said new-vehicle demand remains strong.

“Despite inventory constraints and inflation due to ongoing supply chain issues, we continue to see solid consumer demand for vehicle sales and parts and services throughout our business,” he said, in a conference call April 28.

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Disappeared exotic cars now with auto group landlord - WFLX Fox 29

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A new lawsuit has now been filed in Broward County, revealing more than 30 exotic cars that disappeared from an auto group in Boca Raton are now with the group's landlord, who claims he owns the cars and the group never had the right to sell them.

"There is a scam happening," Frederick Hall told WPTV.

"I've never felt so violated in my life," Chad Zakin said.

Contact 5 spoke with Hall and Zakin in early April when their $400,000 Lamborghinis vanished from Excell Auto Group in Boca Raton.

"It's gonna be a real big involvement of a lot of owners, cars," Hall said.

Hall's vehicle allegedly vanished while it was having routine maintenance work done at Excell's body shop.

Zakin told WPTV he brought his vehicle to Excell Auto to have it appraised. He claims Excell then sold it.

That same week, the owners of Excell Auto Group, Scott and Kristen Zankl, filed for bankruptcy.

Chad Zakin said Excell Auto Group sold his car without his permission for about $400,000, but he hasn't received a penny.

Their landlord, Auto Wholesale of Boca, owned by Moshe Farache, then filed a lawsuit against the Zankls in Palm Beach County, saying the Zankls owe him more than $2 million.

"We're dealing with massive fraud," Jay Farrow, Farache's attorney, told WPTV. "South Florida, unfortunately, is a shady place with some shady people."

Farrow spoke with Contact 5 on Thursday in Broward County, where Farache is now being sued along with the Zankls.

The suit was filed by FVP Opportunity Fund III, a Delaware limited liability company.

According to the suit, FVP loaned the Zankls $7.5 million in January. It accuses them of having a "bold scheme" to "defraud the plaintiffs" and "convert the funds into expensive automobiles."

Jay Farrow, the attorney for Moshe Farache, calls the exotic car case "massive fraud."

"This is part of the scam that Scott Zankl was running, was collateralizing these cars and then in some cases, selling them to unsuspecting victims, cars that belong to my client or even others," Farrow said.

Farache now has the 35 missing cars, which he claims he owns.

The suit accuses him of threatening to kill Scott Zankl if he didn't hand over the cars, allegedly saying, "He was associated with Israeli Intelligence and criminal underworld figures, and that he was a very dangerous person."

"My client denies those allegations," Farrow said.

Excell Auto Group in Boca Raton is a part of lawsuits involving more than 30 exotic cars.

It's all part of an ongoing investigation by Boca Raton police.

"This could look like a Ponzi scheme. At the end of the day, as far as my clients are concerned, they want to clear their name and they also want to assert their rights against the wrongdoers," Farrow said.

When WPTV did the original story, Scott Zankl's attorney, Guy Fronstin, sent us this statement:

"The vehicles in question were unlawfully taken from Excel Auto's showroom and Mr. Zankl is doing everything he can to help the police find the vehicles so that they can be returned to their rightful owners."

Fronstin did not reply to our requests for comment on Thursday.

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2022 college baseball: Conference tournament brackets, schedules, auto bids - NCAA.com

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For more information about the NCAA, please visit NCAA.org.

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ABOUT THE REGULATION

The General Data Protection Regulation (GDPR) applies to all companies, including businesses located in the United States and Canada, who process any information about EU citizens. It is global in reach and introduces a new, broader definition of what 'personal information' means.

The GDPR aims primarily to give control to citizens and residents over their personal data and to simplify the regulatory environment for international business by unifying the regulation within the EU.

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U.S. auto sales to fall in April on tight inventories, rising rates - data - Reuters.com

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Ford pickup trucks are shown for sale in Carlsbad, California, U.S., September 23, 2020. REUTERS/Mike Blake/File Photo

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April 27 (Reuters) - U.S. new vehicle sales is expected to fall in April, as low inventories and rising interest rates boost prices amid high demand, consultants J.D. Power and LMC Automotive said.

U.S. retail sales of new vehicles in April could fall 23.8% to 1.1 million units from a year earlier, according to a report released by the consultants on Wednesday.

Demand remains strong, but with fewer than 900,000 units in inventory at dealerships, sales volumes will be well below year-ago levels, said Thomas King, president of the data and analytics division at J.D. Powers.

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The automotive sector has been hit hard by supply issues, with production being hampered for more than a year by a global shortage of electronic components and supply bottlenecks due to COVID-19 lockdowns in China and the war in Ukraine. read more

Research firm Cox Automotive also forecasts April sales volume to fall 1.7% from March on tight inventories and adds that conditions would likely not improve in 2022.

"We expect production volumes to improve in the second half of the year, but fulfilling existing orders may not allow dealer inventory to accumulate in any noticeable way," Cox Automotive Senior Economist Charlie Chesbrough said in a statement.

Rising interest rates also pose a threat to current transaction prices, with the average interest rate for loans in April expected to increase 33 basis points from a year ago to 4.61%, the consultants said.

They also added the global forecast for light vehicle sales has now slipped to 81.7 million units in 2022, down 900,000 units from last month.

Total new-vehicle sales for April 2022, including retail and non-retail transactions, are projected to reach 1.2 million units, a 21.5% decrease from last year.

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Reporting by Kannaki Deka and Nilanjana Basu in Bengaluru; Editing by Amy Caren Daniel and Krishna Chandra Eluri

Our Standards: The Thomson Reuters Trust Principles.

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SEMA Data Shows Spending on Auto Tech Is Skyrocketing. What Are We Buying? - autoweek.com

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Detroit auto show reveals new name, route for downtown test drives this September - Detroit Free Press

EXCELL AUTO BOCA RATON: New Suit Alleges Default On Massive Loan - BocaNewsNow.com

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Loan Amount Similar To Value Of Scott and Kristen Zankl’s Seven Bridges Home. Carries 24 Percent Interest Rate.

The empty Excell Automotive Showroom at 1001 Clint Moore Road in Boca Raton. Multiple lawsuits have now been filed against Excell and owners Scott Zankl and Kristen Zankl.

BY: ANDREW COLTON | Editor and Publisher

BOCA RATON, FL (BocaNewsNow.com) (Copyright © 2022 MetroDesk Media, LLC) — A new lawsuit filed against Excell Auto and its owners Kristen and Scott Zankl alleges that the couple took a loan valued at $1,329,600.00 from “Savannah Row Development” and stopped paying. The loan, initiated on June 15, 2017, carried an interest rate of 24-percent and required a payment of $27,500 per month. The Zankls, according to the suit, defaulted in March of this year. Savannah Row Development, according to public records, is a real estate development firm with one member — Steven Gelb of Boca Raton.

The loan amount is notable. The Zankls’ Seven Bridges home, used as collateral in another loan, was purchased for $1,345,198 according to Palm Beach County records — roughly the same amount as the Savannah Row Development loan. The Zankls borrowed $750,000 from Seaside National Bank to purchase the home in 2015. There is no indication, according to public records, that the mortgage was satisfied. Even so, as we reported earlier this month, The Zankls allegedly guaranteed another loan with the value of their Seven Bridges home. They defaulted on that loan by allegedly writing bad checks. One of the checks appears below. A foreclosure procedure is underway.

This allegedly bad check for $400,000 was secured by Scott and Kristen Zank’s Seven Bridges Home in West Delray Beach.

Foreclosure attempt is now in process against Scott Zankl and Kristen Zankl’s Seven Bridges Home.

As BocaNewsNow.com reported exclusively on April 8th — in a story copied by television stations and local newspapers — the Excell Automotive Showroom at 1001 Clint Moore Road in Boca Raton was suddenly vacant after years of displaying exotic and high-end cars. Owner Scott Zankl told BocaNewsNow.com exclusively that he was engaged in a civil dispute with his “landlord” who took the vehicles. He said the problem would be resolved in days.

But the so-called landlord, one of Excell’s financiers, said Scott Zankl and Kristen Zankl were engaged in a massive fraud known as “out of trust.” That’s when a car dealer finances the cars on a lot, sells the cars, but doesn’t repay the loan. Excell Auto, Scott Zankl and Kristen Zankl are now named in suits valued in the millions of dollars. As we reported exclusively on April 12th, Excell filed for Chapter 7 Bankruptcy Protection, claiming between $0 and $50,000 in assets while owning between $10M and $50M.

Meantime, BocaNewsNow.com has learned that criminal investigations continue, with people in the midst of deals with Excell Auto Group being contacted by area police. Multiple customers allegedly either provided cars to Excell but never received funds — often valued in the hundreds of thousands of dollars — or provided money to Excell but never received a car. No criminal charges, however, have been filed.

Read the latest lawsuit, here.

Zankl-suite-april-25

Content copyright © 2022 Metro Desk Media, LLC. All Rights Reserved. BocaNewsNow.com ® is a registered trademark. BocaRudeton™ is a trademark of MetroDesk Media, LLC. Sirens™ is a trademark of MetroDesk Media, LLC. “You hear sirens, we know where they went,”™ is a trademark of MetroDesk Media, LLC. “Don’t Want To Be Seen Here? Don’t Be Rude Here!™” is a trademark of MetroDesk Media, LLC. We vigorously protect our intellectual property and journalistic product. Broadcast stations must credit BocaNewsNow.com on air. Print must refer to BocaNewsNow.com. Online must link to BocaNewsNow.com. We have agreements with several organizations. Contact news (at) bocanewsnow.com. Call 866-4-FL-NEWS. Arrest reports are police accusations. Guilt or innocence is determined in a court of law. 

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Average auto loan interest rates by credit score (April 2022) - MarketWatch

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While many factors play a role in the interest rates you’re offered for car loans, your credit score is the most influential. Knowing average auto loan interest rates by credit score can give you an idea of what you might qualify for and help you determine whether you’re getting a good rate on your vehicle loan.

In this article, we at the Home Media reviews team break down auto loan interest rates by credit score for new and used car loans. We also examine how auto loans work and where you can find the best auto loan rates for your credit profile.

Average car loan interest rates by credit score

Creditors group people into categories — sometimes called credit bands — based on credit-scoring models like FICO^® and VantageScore. While other factors affect the auto loan interest rates you’re offered, the credit band your score falls into is among the most influential.

The following table shows the ranges of scores that define these categories, as well as the average auto loan rates for new and used car purchases for each category. This data comes from Experian’s most recent State of the Automotive Finance Market report.

How auto loans work

An auto loan is a type of secured loan that uses the car that’s being financed as collateral. When you finance a car, the lender becomes the lienholder and is the owner of the car title until you pay the loan off.

In essence, this means that while you have the legal right to possess and use the car, it’s the lender that truly owns it. If you fail to make your loan payments, the financial institution can repossess the vehicle.

When you shop for auto loans, you’ll likely see them advertised by annual percentage rate (APR). This figure includes your interest rate and the fees and other costs that come with the loan.

Before you start filling out loan applications, consider using an auto loan calculator to help you get an idea of how rates affect what you might pay. Many loan calculators allow you to enter basic information such as your desired loan amount, rate and term to see how much your monthly car payments would be and how much you’d pay in interest over the lifetime of a loan.

What factors affect auto loan rates?

Auto lenders set interest rates based in part on the likelihood of repayment. The riskier the loan is for the lender, the higher the interest rate it is likely to charge. Several factors indicate risk to lenders and can affect the interest rate you get on a loan.

Here are the most critical factors used to determine your rates:

• Credit score: Your credit score is the factor that carries the most weight. The lower your score is, the higher your interest rate is likely to be.

• Credit history: Your credit score is part of your credit history, but it isn’t all of it. Lenders look at a detailed credit report that includes information about how much of your available credit you’re using and whether you’ve missed monthly payments.

• Loan term: Car loans generally have terms ranging from 12 to 84 months. Longer terms typically translate to lower monthly payments, but they also tend to come with higher interest rates.

• Market rates: The average market rate is a significant factor in the rates you get. Lenders adjust their rates based on what they pay to borrow money, so you’ll see higher rates if the average interest rate goes up.

• Loan-to-value (LTV) ratio: The LTV ratio expresses how much of a car’s value is borrowed. For example, if you want to borrow $20,000 for a car that’s worth $40,000, that’s an LTV ratio of 50%. The lower the LTV ratio is, the lower your interest rate is likely to be.

• Down payment: Your down payment, whether in cash or in the form of a trade-in, affects the LTV ratio. You can find zero-money-down car loans, but you’ll typically get better interest rates by making a larger down payment.

• Debt-to-income (DTI) ratio: Your DTI ratio is the amount you have to pay in debt obligations every month compared to your monthly income. While your debt factors into your credit score, lenders will also look at your DTI ratio to see how much you can realistically afford to pay. The lower your ratio of debt payments to income, the lower your auto loan rates are likely to be.

• Vehicle’s age and condition: Lenders typically have age, mileage and condition restrictions for financed vehicles, and they adjust rates based on those factors. Loans for older, higher-mileage vehicles or those in bad condition come with higher interest rates.

What goes into your credit score?

Credit scores have been widely used since 1989, when FICO, which currently has the most popular scoring model, introduced its system. Credit scores are meant to tell lenders how likely you are to make your required payments on time and in full. Your FICO credit score is based on the five factors below, which are weighted differently.

• Payment history (35%): One of the most significant factors in your credit score is whether you’ve missed payments. This includes whether you’ve had accounts that were delinquent.

• Amounts owed (30%): While having debt doesn’t necessarily mean you’ll have a low credit score, using too much of your available credit can cause your score to fall.

• Length of credit history (15%): How long you’ve had accounts open with creditors affects your score. Having older accounts with long histories of regular, on-time payments will boost your credit score.

• New credit (10%): Opening a new credit account can temporarily cause your credit score to drop.

• Credit mix (10%): Having a variety of credit accounts, such as credit cards, student loans and a mortgage, improves your score.

Where can you get the best auto loan interest rates?

Lenders don’t all offer the same auto loan interest rates by credit score. You’ll likely find a range of rates available to you if you compare auto loan offers. That’s why it’s good to shop around. There are a number of places you can find auto loans. Some may have better loan options than others, depending on your circumstances.

Banks

Most traditional banks offer new and used car loans. Many also offer refinance auto loans, as well as preapproved auto loans that can give you an advantage in the car buying process and make financing easier. If you already have a checking account, savings account or credit card with a certain bank, you may have an easier time getting approved for an auto loan with that financial institution. You may even get a better rate.

Credit unions

Like banks, credit unions typically offer financing and refinancing for new and used vehicles. However, you have to be a member of a credit union to access its financial products. Membership requirements vary, but the process is simple for many credit unions. Joining can be worth it since credit unions often offer lower interest rates and are more likely to approve loans for borrowers with bad credit.

Online lenders

Since they don’t have the overhead of physical branches like banks and credit unions, online lending institutions can sometimes offer lower rates. Many of these lenders are backed by commercial banks or are divisions of commercial banks.

Lending marketplaces

Lending marketplaces let you easily compare car financing offers. After you enter your information on one of these websites, you’ll get several loan offers from different lenders. Using these marketplaces can be a good way to find the lowest rates for your credit profile.

Dealerships

Car dealerships can sometimes offer the lowest auto loan interest rates. While 0% financing is only available for those with excellent credit, you’ll have a hard time finding it anywhere else. But some dealerships offer high interest rates compared to other lenders. Knowing what rates to expect and not allowing yourself to get worn down at the dealership can help you navigate this situation.

Getting a preapproved car loan from another financial institution before you head to the lot may help you negotiate for a better rate, as the dealership may try to beat the other lender’s rate to win your business.

How to get lower interest rates on your auto loan

If you’re looking for the best auto loan rates, these tips may help:

• Increase your down payment: Putting more money down on the car reduces the LTV ratio on your auto loan, which may get you a better interest rate.
• Get a discount: One of the most common discounts in the automotive finance industry is for setting up automatic payments, which can reduce your interest rate by as much as 0.5%.
• Get a co-signer: If you have bad credit, getting a friend or family member with a good credit score to co-sign a loan with you might get you a lower rate.
• Look for a newer car: Most lenders adjust their rates based on the age of a car. If you can find a newer car within your price range, you may get better auto loan interest rates for your credit score.
• Choose a shorter loan term: Longer loan terms have lower monthly payments, but they usually come with higher interest rates. If you can afford the higher payments that come with a shorter loan term, you’ll likely get a lower interest rate and pay less interest over the lifetime of your loan.
• Refinance later: If you’re stuck with a high interest rate due to a poor credit score, you may benefit from refinancing your auto loan in the future. You can take the interest rate available to you now and make timely payments to improve your credit score, which will eventually put you in a better position with lenders.

Auto loan interest rates by credit score: the bottom line

Nearly all lenders set auto loan interest rates by credit score to some extent. While other factors affect the rates available to you, your credit score typically plays the most influential role. Between banks, credit unions, online lenders, loan marketplaces and car dealerships, you have plenty of options for auto loans. Depending on your situation, one may offer you better rates than others.

Recommended auto loan providers

While no one lender offers the best rates for everyone, some offer better auto loan interest rates by credit score than others. The only way to know whether you’re getting the best auto loan rates for your credit score is to source loan offers from several lenders and compare them. We recommend myAutoloan and Auto Credit Express as good places to start your search.

myAutoloan

As a loan marketplace, myAutoloan lets you source offers from lenders in one place. This can help you find the best auto loan interest rates by credit score with less legwork than reaching out to lenders on your own. Rates for borrowers with excellent credit scores start at 1.9% for new cars and 2.15% for used cars, but those with credit scores of 575 or above can find loan offers through the site.

Auto Credit Express

If your credit score is on the lower end of the spectrum, you may have a hard time finding auto loans from traditional lenders. Auto Credit Express is a financing broker that specializes in securing financing for people with bad credit. Borrowers with bad credit, no credit or even bankruptcies may find loans through Auto Credit Express, even if they’ve had a hard time getting financing elsewhere. Because Auto Credit Express works with multiple lenders, rates and credit requirements vary.

Our methodology

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best auto loan companies. We collected data on dozens of loan providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the companies that scored the most points topping the list.

In this article, we selected companies with high overall ratings and cost ratings. The cost ratings were informed by starting APR and loan amounts.

*Data accurate at time of publication

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Auto, Trucks, A&D Severely Affected by Energy Transition - Fitch Ratings

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Auto, Trucks, A&D Severely Affected by Energy Transition  Fitch Ratings

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5 Common Auto Insurance Myths - The Motley Fool

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Don't buy into these myths that could affect your finances. 

---

Key points

• Many people buy into common car insurance myths.
• This includes a belief that car color matters.
• Some people also don't realize credit affects insurance rates.

---

Auto insurance is an important type of insurance protection every driver should have. That's not just because most states require coverage, but also because car insurance provides important asset protection. 

Unfortunately, many consumers have some big misunderstandings about auto insurance that could affect the premiums they pay or the protection they get. In particular, here are five common myths many drivers believe. 

1. Car color matters 

One of the biggest misconceptions many people believe is that the color of a car affects auto insurance premiums. In particular, it's commonly believed that red cars cost more to insure. 

In reality, car color has no impact on auto insurance premiums. The make and model of a vehicle can affect cost, as different types of cars may be more or less safe and more prone to theft. But since color alone doesn't impact the likelihood of an insurance claim occurring, it's not a factor insurers consider when deciding how much coverage should cost. 

2. Credit won't affect your rates 

Some people incorrectly believe their credit score is entirely separate from insurance and has no impact on the rates they are charged. The reality is that insurers consider credit history as one method of assessing the risk of providing insurance. Those who have a history of black marks on their credit record are often thought of as being higher-risk consumers to insure, so they end up paying larger premiums as a result. 

3. Your insurance covers all possible losses 

Another common misconception is that car insurance covers every type of loss that could occur. The reality, however, is drivers face substantial risk of out-of-pocket expenses depending on what kind of insurance they have. 

For example, if a driver purchases only the minimum coverage their state requires, they would end up with a liability insurance policy only. Their insurance would pay for damages that other drivers incur if the covered policyholder caused a crash. But without collision or comprehensive coverage, an insurer would pay nothing if the car was stolen or if the driver got into a crash and damaged his own vehicle. 

Every motorist needs to understand what kinds of coverage are available and make sure they are buying all of the protection they need. 

4. If someone else drives your car, their insurance covers them

Car insurance generally is based on the vehicle rather than the driver. It's common for car owners to not be aware of this, and to assume that lending a car to a friend is risk-free because the friend's insurer would cover the costs if any problems occur. 

The reality is, if a motorist lets someone drive his car and that person gets into an accident, the car owner's insurer will cover losses. And this could make auto insurance more expensive for that owner. 

5. Business use of your car is covered by personal insurance

Finally, many people incorrectly assume if they use their car for business, they will be covered. That's not necessarily the case if a motorist has personal insurance coverage and hasn't disclosed the car will be used for business purposes. It's important to be clear with an insurer about how a car is used to make sure that insurance provides the proper coverage.

By understanding the reality behind these myths, drivers can be sure they are getting the protection they need -- and can realistically understand the factors that affect their premium price. 

Ensure you are selecting the right car insurance coverage

Auto insurance is something that most people don't think about very frequently. While there are several factors that drive people to look to change auto insurance carriers, it is important to educate yourself in order to ensure you select the right coverage for you. The right coverage means not paying for coverage you don't need and not foregoing coverage that would make sense for your personal situation. While price is a major factor, we also consider other factors such as customer service and the claims process when choosing what we think are the best auto insurance providers.

About the Author

Christy Bieber is a personal finance and legal writer with more than a decade of experience. Her work has been featured on major outlets including MSN Money, CNBC, and USA Today.

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Allstate to Increase Magnitude of Auto Rate Hikes in 2022 - Insurance Journal

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Allstate said it is raising auto insurance rates more due to continued upticks in physical damage and bodily injury severity.

The personal property insurer said in a statement on April 21 that first quarter unfavorable non-catastrophe prior-year reserves re-estimates were about $160 million, reflecting the impact of “rapid increases in loss costs since the second quarter of 2021.”

“Given the ongoing loss-cost impacts of the current inflationary environment, Allstate has increased the magnitude of auto rate increases we expect to implement throughout 2022,” said Mario Rizzo, CFO in the statement.

Rizzo said Allstate increased auto rates in 15 states an average of 9.8% in March and has now implemented 53 rate increases in 41 locations averaging about 8.2% since the start of the fourth quarter. Additionally, Allstate’s National General brand increased auto rates an average of 3.8% in seven locations in March.

Last month Allstate addressed the topic of auto rate hikes. Glen Shapiro, president of property-liability, said auto-claim frequency remained below pre-pandemic levels even though miles driven increased, but claims from non-rush-hour accidents have returned to historical norms. Repair costs have increased due to supply-chain delays and higher labor costs.

Rate Hikes, Telematics, Data Science Leading Allstate Back to Profit

In the latest statement, Rizzo said Allstate continued to see “the impact of elevated severity inflation in the current report year” with incurred severity estimates to increase by 11% for property damage and 8% for bodily injury.

All Allstate brand auto insurance rate increases totaled $862 million in the first quarter 2022 after $702 million of rate increases in the fourth quarter 2021, Allstate said.

Allstate also said first-quarter catastrophe losses totaled $462 million pre tax. Catastrophe losses, which primarily included tornado and wind losses from Texas and the southeast, were $227 million March.,

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Written By Chad Hemenway

Chad is National News Editor at Insurance Journal. He has been covering the insurance industry since 2007, reporting on trends and coverage in most lines of insurance as well as natural catastrophes, modeling, regulation, legislation, and litigation. Chad can be reached at chemenway@wellsmedia.com

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Auto portability seen as plug for 401(k) leaks - Pensions & Investments

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If more record keepers follow its lead, Alight Solutions says it's confident that one of the industry's most vexing problems — the loss of some $6.6 billion from 401(k) retirement savings accounts annually through employee cashouts — would soon start to wane.

The record keeper was the first to make auto portability available to its plan sponsor clients and is looking to others to do the same, said Greg Long, Alight's Washington-based director of public policy.

"As more record keepers come on board, this becomes more and more valuable," he said, referring to the relatively new concept of auto portability.

The new auto-portability service, which Alight made available in the middle of 2021, ensures that small account balances that are typically forced out of retirement plans when workers leave their jobs are automatically moved to the plans of their new employers. The service is being offered through the Retirement Clearinghouse LLC, a company that specializes in retirement account rollovers.

"Leakage is a massive problem in the 401(k) area," Mr. Long said, referring to cashouts and other ways that money leaves or "leaks out" of retirement accounts.

Some 5.3 million 401(k) participants with less than $5,000 in their accounts leave their jobs annually, according to a simulation model built by the Retirement Clearinghouse. Of those, 4 million cash out their accounts, removing an estimated $6.6 billion annually from retirement plans. The model is based on data from several sources, including the Employee Benefit Research Institute, the Department of Labor's Form 5500 datasets, and studies from Alight, the Vanguard Group Inc. and Fidelity Investments.

With a record number of people quitting their jobs amid the "Great Resignation," some industry analysts worry that the leakage problem could get even worse. "We do believe the Great Resignation exacerbates the leakage problem," said Neal Ringquist, Retirement Clearinghouse's Lafayette, Calif.-based executive vice president and chief revenue officer.

Plan sponsors are permitted by law to kick out small accounts with balances under $5,000 when workers leave by offering them an option to either cash out their balances or transfer the funds to an individual retirement account or the worker's new employer's plan. Neither the cashout nor the IRA rollover option is ideal. Participants who cash out their balances are taxed on their distributions and are hit with a 10% early withdrawal penalty if under the age of 59½. Those that transfer their funds to an IRA often wind up paying much higher fees than they were in their 401(k) plan. And if a participant doesn't make a choice, the plan sponsor can roll that money into an IRA for the participant or send the participant a check.

Alight's Mr. Long describes the IRA rollover money as a "decaying asset." The money must be invested into a cash-equivalent investment, which he says typically have fees that are greater than the return.

Mr. Long also feels for participants who opt to take a check and cash out. "There is an enormous amount of money that is being penalized, then taxed and then spent that is intended to be money that should be saved for retirement," he said.

The Retirement Clearinghouse in July 2019 gained an edge on its competitors when it received a prohibited transaction exemption from the Department of Labor that allowed it to automatically move funds on a so-called negative-consent basis, meaning it could transfer funds without participants explicitly giving their consent to the rollover. Typically, participants have to affirmatively "opt in" to have their account balances move to another employer's plan.

Retirement Clearinghouse — the only retirement account rollover company to have such an exemption from the Labor Department — is looking to build out its network of participating record keepers. So far, it has two: Alight and Vanguard, which joined the clearinghouse in September and is expected to offer an auto-portability service to its plan sponsor clients this year.

"We feel that we'll have more joining the network in the not-too-distant future," Mr. Ringquist said, referring to record keepers. He declined to say which or how many record keepers are expected to join the network or when. "We are under non-disclosure agreements with prospective record keepers and cannot be more specific," he said.

Record keepers have been slow to come on board due to the lengthy due diligence process they must go through with the clearinghouse, he added. After record keepers clear that hurdle, they must weigh auto portability against other project priorities.

"In some instances, it could take a year or two to work up a priority queue," he said.

Participating record keepers will use the same pricing to charge participants for the auto-portability service, in accordance with the pricing spelled out in the prohibited transaction exemption the Labor Department granted Retirement Clearinghouse, Mr. Ringquist said.

Participants pay a one-time transaction fee for balances successfully rolled into their current employer's plan. The fee is based on account size and is never more than $59, Mr. Ringquist said.

Alight so far has signed on a "handful of plan sponsors" — less than 10, said Mr. Long — who have added auto portability to their retirement plans. Combined, that's 120,000 people who are now eligible to have their small accounts moved, he said.

Virtually all plan sponsors he's talked to think auto portability is a good idea, but most don't want to be first, preferring to wait until there's more people in the clearinghouse, Mr. Long said.

Mr. Long anticipates that auto portability in time will "be standard operating procedure" not unlike auto enrollment and auto escalation as more plan sponsors implement the service and their concerns about being among the first recede.

Also, Mr. Long sees auto portability in retirement plans as being especially useful for employers in low-wage, high-turnover industries. One of its plan sponsor clients that signed up for auto portability, for example, is a large supermarket chain where jobs "bagging groceries and stocking shelves" are neither high-paying nor long term, he said.

"Those are the types of companies that need it more," he said, referring to auto portability.

Vanguard, too, anticipates strong interest from employers with high turnover. Auto portability should be appealing to all plan sponsors but particularly to "plan sponsors that tend to have a higher proportion of lower-wage or low-income workers or plan sponsors that tend to have a very fluid workforce," said David Stinnett, principal and head of strategic retirement consulting at Vanguard in Malvern, Pa.

Vanguard is working with Retirement Clearinghouse to implement the auto-portability service and is talking to plan sponsors about it, he said.

"Plan sponsors are interested to find out more once the service is fully available," Mr. Stinnett said.

Both Messrs. Stinnett and Long share the view that auto portability can help alleviate racial disparities in retirement savings.

Leakage disproportionately harms racial minorities and low-income people, but to the extent that auto portability can solve the problem, "those people are disproportionately helped," Mr. Long said.

For all the benefits auto portability offers participants with small balances, awareness among plan sponsors for now appears to be low, according to an online survey by the Plan Sponsor Council of America conducted in November.

The vast majority of the 79 plan sponsors that responded — 78% — said they never heard of auto portability. Only 7.8% were considering implementing an auto-portability feature in their plans.

"I'm not surprised," said Robyn Credico, North America defined contribution consulting leader at Willis Towers Watson PLC in Las Vegas. "We have not seen a lot of plan sponsors ask for this."

Ms. Credico believes awareness of auto portability will grow as more record keepers make the service available and promote it.

"It's a good idea if the record keepers support it," she said.

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How to set up wireless Android Auto - Tom's Guide

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Setting up wireless Android Auto is actually really easy, provided you’re lucky enough to have a car that supports it. The wireless version of Apple CarPlay managed to get a head start, but a growing number of modern cars can skip the wires and connect to one of the best Android phones.

But how do you use wireless Android Auto? The wired version of Google’s carphone software is easy, and only needs you to plug your phone into the car. Setting up wireless Android Auto isn’t quite as obvious, but it doesn’t require much, if any, extra effort.

Here’s how to set up wireless Android Auto in your car.

How to set up wireless Android Auto

1. Use a USB cable to plug your phone into your car stereo’s USB port. Make sure the ignition and infotainment display are both switched on. Download or update the Android Auto app if prompted.

(Image credit: Tom Pritchard/Tom's Guide)

2. A prompt will show up on screen, asking for permission to connect your car to Android Auto. Click Next.

(Image credit: Tom Pritchard/Tom's Guide)

3. Wait for Android Auto to initialize. 

(Image credit: Tom Pritchard/Tom's Guide)

4. The system should fire up by itself, but you may need to find and press a dedicated Android Auto or Smartphone Connection button on your car’s display.

(Image credit: Tom Pritchard/Tom's Guide)

5. Disconnect your phone. Android Auto should stay connected, but if not make sure your phone’s and car’s Wi-Fi and Bluetooth is switched on.

6. Once the wireless connection is set up, Android Auto will switch on every time you turn on your engine.

Make sure you have that USB port to hand, because there’s no way to set up wireless Android Auto without it.

Which phones support wireless Android Auto? 

(Image credit: Tom's Guide)

Wired Android Auto is available on all phones running Android 6.0 (KitKat) or above, but wireless Android Auto is generally restricted to phones running Android 11 or higher, and only on phones with 5GHz Wi-Fi. If your phone doesn’t have either of these, you’re stuck using a cable until you upgrade.

However, the following phones can connect to wireless Android Auto while running Android 10:

•  Google Pixel 1, 2, 3, 4, including XL models. 
•  Google Nexus 5X 
•  Google Nexus 6P 
•  Samsung Galaxy S8, S9, S10, including Plus models 
•  Samsung Galaxy Note 8, 9, 10 

You can check your phone’s software by heading into the Settings Menu and selecting About. From there click Android Version to see which particular flavor of Android is installed on your phone.

Which cars support wireless Android Auto?

(Image credit: Tom's Guide)

Google has an extensive list of cars that support wired Android Auto, but right now there doesn’t seem to be a comprehensive list of cars with support for the wireless version. Automakers were also fairly slow to adopt wireless Android Auto compared to the wireless version of Apple CarPlay.

However all cars running wireless Android Auto need the same things: Support for Android Auto, naturally, alongside Bluetooth and a 5GHz Wi-Fi connection. Bluetooth is pretty much standard in modern cars, so the 5GHz Wi-Fi is the most likely thing your car might miss. Without it, your phone and car won’t be able to exchange data and make wireless Android Auto work.

The best way to find out for sure is to find a car you like, and do some research. Chances are the automaker will clearly advertise support for wireless Android Auto, but a quick Google search should be just as enlightening.

Once you've set up wireless Android Auto, it's worth getting to grips with some of the other things your car can do. Be sure to study up on essential tips and tricks for Google Maps, how to improve your gas mileage and save money and how to clean your car seat like a pro.

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