Business Growth

Choices Matter

Everyone likes choices, and consumers looking to secure financing for a vehicle are no different. When shopping for the best auto loan, they look at rates, but that’s not all. They’re also looking for value-added options to provide greater security in their decision, especially in today’s turbulent economic times.

So, how are credit unions faring?

According to S&P Global Intelligence, U.S. credit unions grew their auto loan portfolios by more than $6 billion in the fourth quarter of 2021, reporting a total balance of $408.21 billion at the end of the period. Breaking that down, new auto loans at credit unions amounted to $143.20 billion at year-end 2021, up from $142.86 billion at the end of the previous quarter. Used car loans increased 2.2 percent quarter-over-quarter and 10.2 percent year-over-year to $265.01 billion.

Auto loan trends callout

Business Growth F&I

Don’t Let Delinquency Keep You Down

Mark Rappaport President EFG Companies
Contributing Author:
Mark Rappaport
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.

Business Growth F&I

Your Role in Shortening the Dealership Sales Process

Steve Roennau Vice President Compliance EFG Companies
Contributing Author:
Steve Roennau
Vice President
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?