Hotline News: Top News in Fleet and Leasing
Top stories: two new banks enter equipment leasing field.
BANKS AND LEASING-In a move that could signal the start of a full scale invasion, two banks, in separate actions, announced they are entering the equipment leasing field. The banks are the Bank of America based in San Francisco and the La Salle National bank in Chicago. The unprecedented moves are an outgrowth of a ruling last March 18 by the Comptroller of the Currency that national tanks can, upon request, purchase equipment for the purpose of leasing it directly to a customer. The ruling was a departure from traditional interpretations of the lending areas open to banks and possibly will be subjected to a court test. The American Automotive Leasing Assn. has filed a formal protest against the Comptroller of the Currency's ruling, calling it "an obviously ill-conceived and unreasonable proposal."
While both banks initially are going to concentrate on industrial equipment, it can be expected that they will give vehicles a hard look. Other banks are sure to enter the leasing field. The Bank of America intends to set up a full-scale leasing division while La Salle National is working with Nationwide Leasing Corp. with the bank using its own money and Nationwide's organization. Nationwide plans similar arrangements with banks in other cities. One factor which might deter other banks from jumping into the field: A multitude of legal and technical problems arising through ownership of equipment which might be located or moved to any state.
1964 CARS-The Scenicruiser station wagon models scheduled to be introduced this fall by Buick and Oldsmobile have been delayed until the spring, AUTOMOTIVE FLEET has learned. The delay is not the result of engineering difficulties, simply that General Motors waits to make n big splash with the cars at the opening of the New York World's Fair in April. Ford Motor Co. also is planning some new cars for the fair . . . The 95 horsepower engine now standard on Rambler models still will be available on some models this fall, although thee basic power-plant will be a 125-horsepower engine . . . Look for a resurgence of single headlights. At least two makes are dropping their dual light arrangements.
MOTOR LEASE SUIT-The U. S. attorney general has filed a notice of intention to appeal a decision before the U. S. Court of Appeals involving Motor Lease Corp. Last April, the U.S. District Court at Hartford ruled in favor of the company and against the Internal Revenue Service in upholding the legality of capital gains in the sale of motor vehicles where reasonable depreciation has been taken at the time of acquisition of the vehicles. The American Automotive Leasing Assn. will participate in the appeal as a friend of the court.
TIRE PRICE HIKE-Firestone Tire & Rubber Co. instituted a 2.5 percent increase on all passenger car tires and tubes with the exception of certain nylon and winter tires which remain unchanged. General Tire & Rubber Co. followed Firestone's lead and announced identical increases. At press time, other tire companies said they were studying the increases and it is expected they will announcesimilar price boosts. The Firestone increase raises theprice of a 750-14 deluxe champion white sidewall tire from $32.80 to $33.60. The deluxe Champion is the company's original equipment tire for new cars.
ACQUISITIONS—National Car Rental Systems has acquired four rental companies in the New York area. The companies, valued at $l,500,000, give National outlets at Idlewild, LaGuardia and Newark airports and in mid-town Manhattan and Newark. The companies acquired are ABC Rental Co., Airport U-Drive-lt, Newark U-Drive Co, and U-Drive-It Co. of New Jersey, In addition. National has acquired Ryder Truck Rental Inc.'s downtown operation in Memphis (Tenn.) Ryder will continue to operate another location in Memphis, Car rental facilities will be added to National's new Memphis operation . . . Leaseway Transportation Co. has agreed to purchase all of the stock of Arista Truck Renting Corp. of New York for $5.50 per share. The offer was scheduled to expire Aug. 8 . . . Hayden, Stone & Co. and associates are offering 139,044 shares of Lease Plan International Corp. common stock at $53 per share. All the shares are being sold for the account of the William O'Neill family of Cleveland and organizations owned or controlled by them, After the sale, the O'Neill's will not own any of the common shares of Lease Plan and the company will not receive any of the proceeds from the sale.
RENTAL, LEASINGNEWS—The auto rental rate war in New York City was stepped up when reduced 24-hour car rental rates were adopted by National Car Rental System and Hertz Corp. The new rate is $6 per day and 10 cents a mile on compact cars and $7 a day and 11 cents a mile on standard-size oars. Former rates were $10-and-10 cents and $11-and-11 cents respectively. The Hertz rates apply Monday through Thursday and National's rates from 9 p.m. Sunday through 6 p.m. Friday . . . Hertz has opened three franchised locations in Tokyo, bringing the number of countries served by Hertz to 70 . . . Avis Inc. has opened a worldwide reservation center in Chicago. The company has also eliminated inter-city drop off charges in Ohio.
SHORT TAKES—Fleetway System is establishing a franchised new car dealer operation in major cities in eight Western states, Included in • the package is an insurance program through Hardware Mutuals Insurance Co. and financing up to $10,000,000 through Guardian Life Insurance Co, of New York. Jack R. Lynch is handling the organization . . . A guide for determining operating per day and ownership per mile costs for more than 35 different makes and models of cars has been developed by Runzheimer and Co., Rochester, Wis. In the form of a calculator, the guide will be priced at under $30 . . . The Automobile Dealers Assn. of Indiana has adopted a resolution urging auto companies to discontinue direct rebate payments to fleet accounts because such payments are "detrimental to the franchise system" . . . The city of Akron has decided not to replace its 225-car fleet with 1983 models. The estimated $100,000 it would have cost to purchase the cars has been turned over to the street resurfacing fund. The city council said that trade-in bids received from six local auto dealers were not as favorable as had been expected. The city may re-advertise for bids in the fall for 1984 models.
CONVENTIONS—The National Assn. of Fleet Administrators has scheduled its 1984 convention for Chicago, The convention will be held in April at the Sherman House . . . Chicago is also the scene of the mid-year meeting of the American Automotive Leasing Assn. The dates are Sept. 18-17 . . . The National Safety Council will hold its 1983 safety congress in Chicago Oct.28-31.
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