Category: Business Growth

Don’t Let Delinquency Keep You Down

Post author By efgmarketing
Post date March 29, 2016

Contributing Author:
Mark Rappaport
President
Simplicity Division
EFG Companies

Currently, the headlines are offering a lot of doom and gloom for the subprime auto finance market with regards to rising auto loan delinquency rates and the sheer amount of subprime paper.

According to the February Equifax National Consumer Credit Trends Report, 21.7 percent of all auto loans originated between January and November, 2015 were issued to consumers considered to be in the subprime market.

This marks the fourth year where the subprime segment accounted for between 21 and 22 percent of all auto loans.

In addition, Fitch Ratings reported that in February, 60-day delinquencies experienced a 12 percent year-over-year increase, bringing the delinquency rate to 5.16 percent. This is the highest delinquency rate since October, 1996. To put this into perspective, delinquencies peaked at 5.04 percent during the 2008 financial crisis.

Tags auto loan delinquency, EFG, Experian, Fitch Ratings, walkaway

Business Growth F&I

Your Role in Shortening the Dealership Sales Process

Post author By efgmarketing
Post date March 17, 2016

Contributing Author:
Steve Roennau
Vice President
Compliance
EFG Companies

One of the most discussed topics over the last few years within the auto retail industry has been how to shorten the sales cycle within dealerships. Dealers have invested time and money into training initiatives, enhancing their technology capabilities, and in creating an online showroom. Even with all these initiatives, they are still struggling to achieve their goal.

According to a recent survey by eLEND Solutions, 85 percent of dealers say they want a sales process that lasts less than two hours. But, 42 percent report it usually takes three to five hours to sell a car. Now, why is this important to lenders?

One hypothesis is that those dealers who achieve significant reduction in the time it takes to sell a car will see more foot traffic, referrals and repeat customers, meaning more opportunity to increase indirect loan volume. In addition, by acting as a partner with dealers in this endeavor, it further fortifies the lender-dealer engagement, potentially resulting in increased loan volume and longer-term relationships with successful dealers.

It’s always important to remember that dealership success equates to lender success. So why shouldn’t you be invested in your success?

Tags dealership sales, EFG, EFG Companies, F&I, Finance & Insurance, vehicle service contract, vsc, walkaway

Business Growth Economy

Flat Auto Sales Doesn’t Have to Mean Flat Loan Volume

Post author By efgmarketing
Post date February 23, 2016

Contributing Author:
Steve Roennau
Vice President
Compliance
EFG Companies

The National Automobile Dealers Association predicts new unit vehicle sales to top out at 17.7 million in 2016, which equates to less than 1% increase from the 17.5 million units in 2015. Industry experts across the board are expecting auto sales to plateau because of rising interest rates, increased regulatory compliance costs, and wage and income pressure. But that’s not to say there isn’t money to be made.

17.7 million units is still vastly greater than the 10.4 million unit sales from 2009. If anything, it marks one of the strongest recoveries the retail auto industry has ever experienced. With that in mind, there is still plenty of opportunity to increase loan volume, especially in the subprime market.

That’s right, I said there is opportunity in the subprime market. Even with rate increases and flat wage growth, the opportunity to increase loan volume and better protect your loan portfolio is there for those willing to look for it.

With the Federal Reserve slowly raising interest rates, everyone is on alert to see if and how economic setbacks will affect the subprime market. After all, economic downturns tend to hit the subprime demographics first, with sustained impact.

Tags EFG Companies, NADA, National Automobile Dealers Association, steve roennau