Repossession and Remarketing Trends Revealed
CARY, N.C. — Cherokee Automotive Group Analytics recently completed another round of polling and released results. The questions were asked to executives representing dealerships, auto auctions, banks, credit unions, financial companies, logistics and manufacturing.
Two primary topics were the focus of the latest survey — repossessions and remarketing
Reviewing these trends, CAG discovered that nearly 40 percent of participants had prime, near-prime and subprime loans in their portfolio. Meanwhile, more than one-fifth only had prime loans.
While 15.4 percent of portfolios had prime and near-prime loans, an equal percentage had portfolios entirely made up of subprime auto loans. Additionally, 7.7 percent had both prime and subprime loans.
Continuing on, nearly 30 percent of participants indicated that 2.25 percent of their portfolios are non-performing. Also, more than 40 percent noted that an average of 9 percent of their accounts were non-performing. Moreover, apparently 14.3 percent had a zero percent non-performing rate, and 14.3 percent had a 100 percent non-performing rate.
When questioned what automated software they use to manage repossessions, almost 45 percent said they use an unspecified software. More than two-fifths, or 42.8 percent, use OPENLANE or SmartAuction (21.4 percent each), and 15 percent use I-BEAM. Furthermore, 7.1 percent each use AutoIMS, Fiserv and RDN.
So how much money did the participants spend on average to train staff on software? According to the results, more than half did not spend any money. Almost 30 percent spent an average of $16,666.66.
Continuing on, a large majority of respondents, 75 percent, do not use GPS devices to help discover assets, while 25 percent do utilize these devices.
Given the current economy, another question CAG asked what whether repo policies are stricter, the same or more lenient. Two-thirds said their repo policies are more lenient, whereas 10 percent indicated they are stricter. Another 22 percent said they have the same policies they did a year ago.
Kicking off the questions for this section, CAG asked executives if they have ever considered or used a program to pre-market repossessed assets during the holding (or cure) period. In response, 80 percent said that they had indeed either considered or used a pre-market program. More than one-fifth of those questioned said they have not used one nor considered it.
Turning to training, half of those asked said they incurred minimal or no cost to train employees on software. Meanwhile, 25 percent said they spent about $2,000 and an equal percentage spent about $10,000.
A topic that has been debated for years was next up in the questions. CAG asked do executives whether they prefer to remarket assets online (via an online auction platform) or via a physical auction. A total of 81.2 percent said they prefer to use both online and physical auctions, while 12.5 percent look solely to online auctions and 6.2 percent prefer physical auctions.
Most of the participants, or 90 percent, said they recondition their assets prior to sending them through the lanes. Less than 10 percent noted that they do not recondition. Also when it comes to this topic, 100 percent of those who do recondition said it is valuable and that it results in higher recovery rates at auction.
Finally, participants were asked whether assets are bringing in higher dollar amounts at auctions year-over-year. While 75 percent said that they are getting higher dollar amounts for their units, less than 20 percent indicated they are not. Also, less than 10 percent said their repossessed units are bringing in the same value as a year ago.
Editor's Note: This article only highlights some of the findings. For full findings of future polls, please sign up to participate in CAG Analytics at www.cherokeeautomotivegroup.com/analytics.