BLOOMFIELD HILLS, Mich. — Whether it's associated with a large, public dealer group or
a single buy-here, pay-here lot, matching vehicles up with financing remains
one of the biggest challenges managers still face nowadays.

Recently, SubPrime Auto Finance News found the top boss from
Penske Automotive Group and the current president of the National Independent
Automobile Dealers Association discussing similar circumstances. Chairman Roger
Penske's stable of more than 140 dealerships turned more than 39,000 used
vehicles in the third quarter.

During a conference call last Friday when the group
discussed its third-quarter performance, Penske said, "I think used-car prices
have gone much, much higher than any of us expected." He went on to discuss the
financing part of turning those used models.

"As (used-vehicle prices) have gone higher, you have
somewhat of a cap on profitability because the advance rates on used cars,"
Penske said. "When they get too high, the finance companies just won't do it.
By the time you put finance costs and whatever else you're selling from an
aftermarket standpoint and what the market is, the amount of financing they can
offer is capped."

However Penske is expecting some price moderation as 2012
finishes.

"I think you'll start to see some deterioration. Obviously
we see it normally in the fourth quarter because of the year-end. A lot of the
used-car guys need to get rid of their cars and pay their banks," Penske said.

Moderating vehicle prices would be welcomed news to Chris
Martin, NIADA's current president who runs a BHPH dealership in Fayetteville,
N.C. Martin recently talked about the balancing act he's doing to fill
inventory with units that will fit loan terms while still running properly for
the duration of the contract.

"We're averaging over $1,000 a car in reconditioning cost.
We're very particular and want to make sure we continue to put cars on the road
that are good for our customers and good for our reputation," Martin said.

"It's as tough as I've ever seen it to try to find the kind
of vehicles we need to put on our lots," Martin continued. "It's obviously
still out there. We just have to work a little harder to find it. You talk to
some guys and they don't seem to be having much of an issue in finding
inventory. That tells me that they're just doing what they have to do to find
it."