8 features of DriveTime’s refurbished mobile site

With more consumers shopping for their next car using their mobile devices, DriveTime wanted to upgrade its offerings in an effort to capture those potential sales.

On Tuesday, DriveTime announced the launch of a new mobile site with innovations designed to extend to both the customer experience and the technology DriveTime employed in launching the site. 

Customers will now see:

—Improved and faster page navigation when customers are on our site (single-page application platform).

—Changes to content layout and imagery based on user behavior.

—Content tailored to the phone location (geolocation logic).

—Enhanced vehicle photos.

—New search filters to enable customers to find exactly what they are looking for in DriveTime’s new used car inventory, including number of prior owners and accidents.

—Market price comparisons on thousands of used vehicles.

—Three-day guaranteed online pricing of customer trade-ins that’s being tested in select markets.

—Easy to find AutoCheck vehicle history reports on any of the 15,000 DriveTime used vehicles available nationwide.

At the same time, DriveTime emphasized that it has retained all of the existing customer friendly features of the DriveTime experience, including:

—Streamlined contracting and e-signing

—Speed of financing online with a credit score and starting down payment in less than two minutes

—No haggle pricing, a no questions asked five-day used vehicle return program

—Salaried sales advisers at dealerships focused on helping our customers find the right used vehicle for them from the thousands of used vehicles available

“There are a number of off the shelf mobile or website products offered by vendors to the new and used car industry.  With over 1.2 million users each month on our desktop and mobile sites, we elected to custom develop our mobile site based on what customers are telling us they want — quick and easy access to the information they want to see, a customer experience game changer in used vehicle retailing,” said Scott Worthington, DriveTime’s vice president of retail marketing.

“We’re just beginning to reimagine the entire vehicle retail experience,” Worthington added.

DriveTime also found it needed cutting edge technology to deliver these unique, new customer experiences.

Don Irwin, director of IT, and Shawn Curran, managing director of retail and marketing product development, said, “With 125-plus IT employees at DriveTime, we have a large pool of IT expertise to draw on to review and execute exciting new technologies that allow us to truly enhance the customer experience within the used car industry.  And, the mobile site was a key priority for our digital retailing initiatives. Because of our customer experience focus, load time and navigation performance were critical concerns during the development of the new site. 

“It was also a lot of fun to dig further into SEO compatibility because of our unique approach with the single-page application platform,” they continued. “Our team also implemented a best in breed solution incrementally delivering data as required to make the used car shopping experience as fast as possible. 

We accomplished this using the Angular 4+ client-side framework and Node.js for the server build, and for data and other dependencies we were able to use bleeding edge technologies like Azure CosmosDB, Azure Search, Azure CDN, Redis Cache and Azure Service Bus,” Irwin and Curran went on to say.

“From an IT perspective, we had a blast with this project,” they added.

NIADA notes: Dealer optimism high; new relationship with Lyft

Independent dealers went into 2018 with an upbeat mood.

Why? The economic and retail sales growth expectations of independent dealers have improved substantially, according to the National Independent Automobile Dealers Association’s business confidence survey for the fourth quarter of 2017.

The survey of NIADA members is conducted each quarter in partnership with Equifax to gauge the viewpoint of used-vehicle dealers regarding general economic conditions and business concerns.

The association highlighted that 50 percent of the dealers surveyed said they expected economic conditions to improve in Q1 2018, up from 36 percent in the Q3 survey.

The results showed retail sales growth expectations improved from 55 to 67 percent, and the number of dealers who expected to increase their inventory investment this quarter rose 17 percentage points — a 42.5 percent increase from Q3.

NIADA pointed out that its dealer sentiment results align with a recent survey of members of the National Federation of Independent Business that showed optimism near an all-time high, at a level not seen in 34 years, according to NFIB president and chief executive officer Juanita Duggan.

NIADA determined the big drivers of that renewed positivity include expectations of tax relief from the new tax bill passed by Congress, positive consumer sentiment due to the lowest unemployment rate in more than 30 years and confidence in the current administration’s pro-growth, anti-regulation policies.

The association acknowledged used-vehicle inventory costs remain robust, with the latest Manheim Index climbing 7.8 percent year-over-year.

NIADA noted that inflationary inventory situation continues to put pressure on the business expense side of the ledger, which is one reason 57 percent of dealers expected their cost of doing business to increase, up from 45 percent in Q3.

Survey orchestrators explained that jump also reflects the significant investment independent auto dealers continue to make in their digital showroom — as reflected in the survey, which shows 56 percent planned to increase their digital marketing spend.

And like any entrepreneur might say, NIADA’s latest project to gauge dealer mindsets emphasized how the cost of doing business weighs heavily on operators.

The expectation of rising expenses also showed up in dealers’ perception of the single most important problem facing their business — 25 percent said it was the increased cost of doing business — by far the most popular choice.

The cost of doing business was followed by heightened competition from franchised dealers (17 percent), lack of customer prospect traffic/leads and lack of quality retail inventory (12 percent).

NIADA mentioned government regulations/red tape — usually one of the most popular responses — was near the bottom of the list at 6 percent.

The overall picture shows NIADA members expected business to improve heading deeper into 2018.

That optimism is bolstered by strong 3.9 percent holiday retail sales growth — well above the 10-year average of 2.6 percent — as well as rising wages, stock market strength, increasing employment and a generally positive economic outlook.

The complete survey data from NIADA and Equifax can be viewed here.

Lyft and NIADA partner to help dealers turn metal

In other association news, ride-sharing provider Lyft has joined with NIADA  as its latest National Member Benefit partner.

The partnership, what NIADA contends is unprecedented in the ride-sharing industry, provides dealer members with opportunities to improve their bottom line through referral incentives and improved transportation solutions for customers while also supporting Lyft’s efforts to expand its driver community and providing economic opportunities for dealership customers.

NIADA member dealerships can sign up to be a Lyft referral partner and receive bonuses for each driver they refer. Customers who sign up for the program will also receive a bonus shortly after they begin driving for Lyft, which they can put toward their down payment and monthly costs of purchasing a vehicle.

The partnership enables dealerships to increase sales through the Lyft referral program.

In addition, Lyft’s Concierge program can offer NIADA members an easy, reliable and inexpensive way to provide transportation for customers whose vehicles are laid up in service.

Concierge can enable the dealership to request rides for its customers to get where they need to go while their car is being serviced, whether it’s running errands, going to work or heading home to take care of their children.

Increased mobility provides a better experience for the customer in a cost-efficient way, according to both Lyft and NIADA.

“We are excited to work with NIADA in a unique partnership that’s helping 20,000 independently owned dealerships increase profits and elevate their customer service while expanding our driver community and growing our Concierge portfolio,” said Gyre Renwick, vice president of Lyft Business.

“By leveraging our holistic business solutions strategy, NIADA is able to provide independent dealers across the country with referral opportunities for every driver sign-up, with the potential to lead to an increase in sales,” Renwick continued.

“Simultaneously, we’re also helping improve the overall customer experience by giving dealerships the ability to dispatch Lyft rides for customers whose vehicles are being serviced, through our Concierge platform,” Renwick went on to say.

NIADA senior vice president of member services Scott Lilja insisted teaming with Lyft provides an “unparalleled opportunity” for NIADA members to profit from the growing opportunities created by the emerging ride-sharing industry.

“Forging new, innovative partnerships that foster synergies between emerging and traditional mobility solutions while helping our membership sell more vehicles and satisfy more customers fits perfectly with our National Member Benefit partnership mission,” Lilja said.

Registration open for NIADA/NABD Conference

Now that the National Alliance of Buy-Here, Pay-Here Dealers has been acquired by NIADA, independent operators need to make only national conference trip this summer.

The NIADA/NABD Convention and Expo, set for June 18-21 at the Rosen Shingle Creek Resort in Orlando, Fla., is a product of the National Independent Automobile Dealers Association’s acquisition of the assets and operations of the National Alliance of Buy Here-Pay Here Dealers, a deal that merged NABD’s conference and educational services into those of NIADA.

“We believe the combined Mega-Conference will be the largest in the used car industry and will provide unmatched resources for all dealers and allied industry partners,” NIADA chief executive officer Steve Jordan said. “Our goal is to provide a true one-stop shop for dealer education and specialized training for any automotive dealer business model, including the BHPH-specific topics and information you’ve come to expect from NABD over the past 19 years.”

In addition to NABD’s BHPH education, attendees can look forward to sessions offering training from the industry’s best and brightest in retail operations, compliance, certified pre-owned, business operations and much, much more.

It will also include the largest Expo Hall in NIADA Convention history, packed with more than 200 exhibitors offering the latest cutting-edge technology, products and services designed to help dealers stay on top of the ultra-competitive used car market.

NIADA acquired NABD on Dec. 14, completing more than two years of review, strategic discussions and due diligence and providing a succession plan for NABD, founded in 1998 by Ken Shilson.

“Success in this industry is about working together,” said Shilson, NABD’s president. “It’s about using our collective resources to help our members succeed. And that’s exactly what we’ve done here. We’re working together for the success of the used car industry, which is what this merger is about.”

NABD’s Ingram Walters agreed the deal embodies what NABD has always been about.

“Our goal at NABD has always been the dealers’ success,” Walter said. “This combination will provide even more basis for that and an ongoing plan for their success.”

The NABD staff will transition into NIADA and continue in expanded roles to serve the needs of NABD members, NIADA members and the BHPH industry.

“NABD has provided a strong voice and specialized educational resources to more than 14,000 members over the past 19 years,” Jordan said. “I am pleased that the NABD legacy will live on within NIADA as we continue to develop new ways to serve the entire used motor vehicle industry.”

A fall conference in Las Vegas is also under development, with plans to be announced in the coming months.

To register for the upcoming NIADA/NABD Convention and Expo or for more information, visit or

Done deal: NIADA acquires NABD

Just as the industry was purchasing last-minute holiday presents and figuring out where extra guests were going to sleep, the National Independent Automobile Dealers Association (NIADA) and the National Alliance of Buy-Here, Pay-Here Dealers (NABD) announced an agreement on Dec. 20 that their leaders hinted was coming.

Officials explained NIADA has acquired the assets and operations of NABD and will merge NABD's conference and educational services into those of NIADA.

NIADA said it closed on the acquisition on Dec. 14, completing more than two years of review, strategic discussions and due diligence.

The merger provides a succession plan for NABD, founded in 1998 by Ken Shilson.

“We are thrilled to formally join forces with Ken Shilson, Ingram Walters and the entire NABD team as we move forward together with a long-term NABD succession plan,” NIADA chief executive officer Steve Jordan said.

“NABD has provided a strong voice and specialized educational resources to more than 14,000 members over the past 19 years. I am pleased that the NABD legacy will live on within NIADA as we continue to develop new ways to serve the entire used motor vehicle industry,” Jordan continued.

The organizations indicated the NABD staff will transition into NIADA and continue in expanded roles to serve the needs of NABD members, NIADA members and the BHPH industry.

“Success in this industry is about working together,” said Shilson, NABD’s president. “It’s about using our collective resources to help our members succeed. And that’s exactly what we’ve done here. We’re working together for the success of the used car industry, which is what this merger is about.”

NABD’s Walters agreed that the deal embodies what NABD set out to do nearly two decades ago.

 “Our goal at NABD has always been the dealers’ success,” he said. “This combination will provide even more basis for that and an ongoing plan for their success.”

That plan includes merging NABD's National BHPH Conference into the NIADA Convention and Expo for a combined NIADA-NABD Mega-Conference set for June 18-21 at the Rosen Shingle Creek Resort in Orlando, Fla.

A fall conference in Las Vegas is also under development, with plans to be announced in early 2018.

For more information on the upcoming NIADA-NABD conference, visit or

J.D. Byrider honors top franchises

J.D. Byrider recently celebrated with the buy-here, pay-here corporation’s 54 owners at the company’s annual convention in Hollywood, Fla.

At the event, three Midwestern dealers won top honors as a part of J.D. Byrider’s annual award program.

The Franchise of the Year winners were chosen in three categories based on size of their franchise holdings:

• Single Location: Keith Kocourek for his Wausau, Wisc., dealership. Kocourek also earned the award last year.

• Mid (two to three locations): Mike Burgstone, who owns dealerships in East Dundee, Glendale Heights and Joliet, Ill.

• Multiple (four or more locations): Roy Wagner, who owns dealerships in Anderson, Bloomington, Columbus, Evansville, Muncie and Richmond, Ind. and Kansas City, Mo. Wagner is one of the company’s longest established franchisees. He opened his first location in 1993.

“These owners consistently put our customers first and delivered on our corporate mission to provide our customers with quality, affordable vehicles,” J.D. Byrider chief executive officer Craig Peters said. “We couldn’t be more proud of their commitment to excellence.”

The Franchise of the Year award is based on customer feedback as well as performance related to successful sales and financing and overall operation.

About 260 franchise owners, personnel and vendors gathered at the annual convention in November where they heard from executives about the state of the company, participated in a variety of instructional seminars, team building, and networked with fellow dealers.

J.D. Byrider franchisees operate more than 150 locations in 32 states across the country.

NABD offers 3 conference sessions to enhance operators’ customer base

Of the 21 different training sessions the National Alliance of Buy-Here, Pay-Here Dealers (NABD) is organizing for its next conference, there are a trio of segments that might be most beneficial to operators looking to build a larger and stronger portfolio of paying customers.

Along with conference keynote speaker Steve Siebold, it’s all on tap for NABD’s Orlando BHPH Conference titled “Opportunity Knocks – Best Ways to Respond.” Dealers can still secure registration discounts through Friday for the conference that begins on Oct. 23 at the Rosen Centre in Orlando, Fla.

While Siebold offered a glimpse of his presentation in a video available here as well as at the top of this page, NABD highlighted all of its sessions, including the three that might give operators the strategy they need to grow their customer base.

LHPH – Another Alternative
Oct. 24 at 10 a.m.

Leasing is an important alternative business model in the competitive environment of today. What are the advantages and disadvantages of establishing a lease-here, pay-here business? What regulations apply to LHPH? Where can you find capital to finance a lease portfolio? How do you make these leases compliant? In this workshop, a panel of successful lease operators and experts explain how to do it correctly. NABD insisted longer terms and lower down payments are not the recipe for success. Learn how leasing can help to avoid these pitfalls.

Ways to Increase Your Sales
Oct. 24 at 4:15 p.m.

Competition for the best customers has made the BHPH industry more challenging than ever during the last two years. Franchised dealers, credit unions, special finance companies are all competing for the customers who normally land within the BHPH segment. In this workshop, Bill Neylan of Tax Max will explain how the tax refund market has changed and provide creative ways to gain or regain that business. Irregular payments can keep customers paying.

Best Underwriting Practices
Oct. 25 at 9:15 a.m.

Every BHPH operator wants to regain lost market share. Good underwriting is needed to avoid mistakes made in the past. Lower down payments, lower repayments, and longer terms are not the recipe for success. During this interactive panel you will learn how credit scoring, and credit bureau and alternative credit data will help you make better decisions. Chuck Bonanno, 20 group director for the National Independent Automobile Dealers Association, will explain what 20 group members are doing to get the best customers and keep vehicles sold.

For further information or to register, visit or call (832) 767-4759. Early registration discounts are available through Friday. NABD also has arranged $179 per night room rates at Rosen Centre with no resort fees while supplies last.

10 elements that will factor in your BHPH rebound

The past 24-month period has seen the highest level of subprime and deep subprime competition in history. Fueled by “cheap money” raised with Wall Street syndicated auto bond securitizations, the subprime auto finance market has grown to an estimated $200 billion.

Auto finance receivables, for both new and used vehicles, as of March 31 reached a record $1 trillion with $82 billion outstanding — the highest in history. The deep subprime market (credit scores below 550) has seen credit unions, franchised dealers, finance companies and others compete with independent operators for low credit score customers.

As a result, the independents have lost approximately 20 percent of their market share to credit unions and the captives that finance franchised operators.

Despite this highly competitive environment, “opportunity knocks” for the independents today.

Many of the deep subprime auto bonds are experiencing higher defaults, and repayment performance is deteriorating. Finance companies and captives have tightened underwriting and credit criteria in 2017 in an effort to reduce losses. Banks are under increased regulatory scrutiny to tighten credit standards and shift lending to higher credit quality customers. These changes will reduce competition in the subprime and deep subprime credit sectors in the future.

As subprime customers default they will return to the independents and their vehicle repossessions will be available at auctions.

The ability to capitalize on opportunity in the subprime finance market will be dependent upon the following:

1. Capital availability to grow and regain lost market share with the financial flexibility to accomplish it.

2. Efficient systems and processes that enable operators to increase originations without corresponding increases in overhead.

3. A proactive approach in connecting with customers previously lost to competitors who will now be needing transportation.

4. Good underwriting practices, which properly match the customer with a vehicle, they can afford over a reasonable payment term.

5. Good collection procedures, which keep each customer paying over the life of the contracts.

6. A compliance management system, which helps operators avoid regulatory and legal mistakes which can cost them millions.

7. Recovery operations which reduce losses when customer defaults occur.

8. Business models that maximize the cash return on their portfolio investment.

9. The right inventory to get the best customers back.

10. Knowledge of the latest rules and regulations and relevant training for their employees to operate successfully.

It sounds simple, but doing the above will not be easy. It starts with each operator’s commitment to address the items above in their own operations. Hoping the competition will go away is not a prudent strategy. Operators must be proactive to make 2018 a better year.

NABD’s upcoming BHPH Conference on Oct. 23 through 25 in Orlando’s Rosen Centre will focus on the opportunity in the subprime auto finance market, and suggest the best ways to respond to the current challenges. A sold out Solutions Hall will showcase capital providers and the newest products and services to help operators be more efficient and to maximize profits and cash flow. Industry technology has never been better but each operator must properly integrate it.

For further information, or to register, visit or call (832) 767-4759. Early registration discounts are available prior to Sept. 23. NABD has arranged $179 per night room rates at Rosen Centre with no resort fees while supplies last. Don’t miss this opportunity to prosper in subprime auto finance today. Good luck!

Ken Shilson is president of Subprime Analytics ( and the National Alliance of Buy-Here, Pay-Here Dealers ( Subprime Analytics uses data mining to perform computerized portfolio analysis for operators and capital providers. NABD is the nation’s largest BHPH special interest group for operators and product providers with more than 13,000 members.

Actions to define the right risks and rewards

Our series continues now that we’ve identified “eight risk questions that might keep you up at night,” as well as how can we better identify risk as a buy-here, pay-here dealership.

An important aspect of lending is not only which accounts to watch but how to monitor them and develop a well-defined proactive workflow strategy.

Many investors use a risk/reward ratio to compare expected returns of an investment to the amount of risk undertaken to capture these returns.

Fundamentally, the concept is the same in consumer finance. How much risk is acceptable in order to realize a certain level of reward? Securitization lending is predicated on assessing risk. In theory securitizations permit lenders to accept more known business risk. There is a premium associated with higher risk factors. Facilitating this shift are more robust risk assessment models which provide analytical overview for those willing to accept elevated risk within a portfolio.

Examples are plentiful with respect to insurance industry and its approach to connecting aspects of risk to individual insurance policies.

As recently reported in The Economist: “Michal Kosinski of Stanford University and colleagues at Cambridge University recently found that computers which are fed a person’s Facebook ‘likes’ are better than a human analyst at predicting whether they smoke or take drugs. Such prying is just the beginning: Insurers speak with straight faces about a time when sensors in customers’ homes will alert plumbers to weak pipes before they burst, and glucose meters in contact lenses will keep a record of how healthily they are eating.”

Data mining and monitoring not only allow insurers to price policies more accurately, but also enable them to modify customers’ behavior. “I think of us as Big Mother,” says Brian Vannoni of Guidewire, a firm that analyses data for insurers.

Within the lending community measuring risk reward has similar yet different characteristics. Essentially, lenders from all segments of business want to understand what the elements of risk are associated with a particular decision to extend credit. Basic ground rules still apply within that process.

Extending credit means evaluating the 5 C’ which still apply:

The five C's of credit is a system used by lenders to gauge the creditworthiness of potential borrowers. The system weighs five characteristics of the borrower and conditions of the loan, attempting to estimate the chance of default. The five C's of credit are character, capacity, capital, collateral and conditions. The difference today is that a review of a potential borrower with respect to the five C’s is analytically compiled and is light years more predictable than what it was before  using alternative data. 

Risk reward analysis in consumer credit portfolios attempt to quantify elements of risk associated with the most likely outcome of a consumer behavior. The coordinated outcome of using analytical scoring models to approve or decline credit is first step. Having insight to the likelihood an account will default permits a lender to prepare for such an outcome.

The obvious next question is once approved which account represents the greatest risk of loss. If identified sooner can the behavior be modified to alter the projected course of events i.e. charge-off. But what if we could identify not only the individual element of risk but the degree of associated risk?

Specifically, as we discussed previously, identification of risk through the approval process permits an analytical segmentation of accounts which are stratified to the degree of severity. Thirty day delinquency cured with normal treatment strategies is much less troublesome than 90-day delinquency that is non- responsive.

If we could profile behavior before it occurs just as Mr. Kosinski at Stanford accomplished by predicting a certain behavior before it happens then we could use data segmentation to predict a financial loss to the institution?

Essentially, in a generic sense a correlation analysis provides a distribution of scores where above a certain score the applicant is approved and below it is declined. When approved at a certain scoring band there is correlated loss rate. If the score is raised the loss rate should decline. If the rate is lowered expected losses would increase. That is in theory.

The question is how frequently should these scores be recalibrated?

How often are they analyzed and compared to expected value models.  And finally, are embedded scores working as projected?

Most companies use outside consultants to confirm those questions. Why bring engage consultants? Prevailing mindset is to ensure independent assessment and to minimize any unintended internal bias.

Greg Shelton is president at Partners Consulting, a management consulting firm specializing in operational assessments, workflow reviews and strategic planning for management teams in the accounts receivable management industry. Maria Singson is president and chief executive officer of, which offers risk and marketing analytics to help companies target profitable segments mitigate risks. Shelton can be reached at (678) 575-1136 or Singson can be reached at or (908) 499-4037.

2 ways tighter credit helped Car-Mart

Along with elaborating a bit about his upcoming retirement, America’s Car-Mart chief executive officer William “Hank” Henderson described how underwriting tightening in other areas of the auto-finance market is benefitting the chain of buy-here, pay-here dealerships.

The market change is improving not only the caliber of customer Car-Mart saw during the first quarter of its 2018 fiscal year that ended on July 31, but also the quality of vehicles the company is able to stock at its 140 stores.

“We’re seeing some customers circle back,” Henderson said during Car-Mart’s quarterly conference call with investors. “They’ve been over there and tried the other side, and now they’re back. And I think that’s evident and actually our sales for peak customers is maybe at an all-time high. It’s very high during this first quarter.

“And then also I think we’re, as we mentioned, doing a little better job with our inventory, seeing some improvements there. And so I think all those things combined help push up the store productivity,” he continued.

Car-Mart posted increased sales volume productivity with 28.2 retail units sold per store per month, up from 27.9 for the prior year quarter.

All told, the company’s stores retailed 11,837 vehicles during the quarter with an average retail price of $10,386.

“We are pleased with our continuing efforts to improve the quality of our inventory and improve inventory turns and efficiencies, and these efforts are having a positive effect and will continue to benefit us as we move forward,” Car-Mart president Jeff Williams said.

“We will remain aggressive with our inventory management, but we will ensure that we have a good selection of quality cars, trucks and SUVs in our dealerships to attract our target customer,” Williams continued.

“As credit gets a little tighter in the markets above us, the flow of product then in our market becomes much better,” he went on to say. “We’ve been in a period for several years now where the flow into our markets has been stuck. It's maybe the new-car dealerships because that financing has been available.

“So as it tightens up, we get a better flow of products, and we get to start cherry-picking a little bit,” Williams added.

A few other metrics of note from Car-Mart’s Q1 performance included:

—Gross profit margin percentage decreased to 41.4 percent from 41.8 percent for the prior-year quarter.

—Net charge-offs as a percent of average finance receivables stood at 6.4 percent, up from 6.2 percent for prior-year quarter.

—Accounts more than 30 days past due increased to 4.6 percent of the portfolio, up from 4.4 percent at close of the previous year’s quarter.

—Provision for credit losses came in at 26.6 percent of sales versus 25.7 percent for prior-year quarter.

More on executive transition

As BHPH Report previously published, Car-Mart also announced Henderson will retire as CEO at the end of the year with Williams replacing him. Henderson discussed the move again during the conference call.

“It has been an incredible fantastic experience to be part of such a great team of people to help and build and grow this company into what is today, and I feel truly blessed to have had this opportunity,” Henderson said.

“Tremendous amount of gratitude to the hard working dedicated people with such high characters that I have been so very fortunate to work with throughout this time,” he continued. “We’ve been through some great times, and we’ve been through some very challenging times all along the way.

“They fought hard to preserve our company culture, and I cannot even begin to ever thank them all enough for their tireless efforts,” Henderson went on to say.

An analyst asked about who might take Williams’ position as chief financial officer and whether it will be a candidate from within the company or if Car-Mart might choose someone from outside its current executive ranks.

“We are in the process, and we’ll have some news for you guys just as soon as we can,” Williams said.

Henderson stepping away as Car-Mart’s CEO at year's end

While sharing results from the first quarter of its 2018 fiscal year, America’s Car-Mart announced a major change in leadership will be coming at the end of the calendar year.

Car-Mart said in a news release posted late on Thursday that current chief executive officer William “Hank” Henderson would be moving into a role as CEO emeritus and board member of the 140-store chain of buy-here, pay-here dealerships. The change will come on Dec. 31.

Rising into the CEO post will be Jeff Williams, who has been Car-Mart’s president since last March.

“I have been with the company for over 30 years now and could not be more proud of what we have built and the position the company is in to be able to continue to prosper into the future,” Henderson said in the news release. “We have a great team in place, and the time is right for me to take a step back from the day-to-day operations.”

Henderson will continue to be involved in Car-Mart’s activities as an adviser to Williams and senior management.

“I am greatly looking forward to contributing in my new capacity, and I am very excited about the future of our business and the opportunities that lay before us,” he said.

Williams has served Car-Mart in a variety of roles, including chief financial officer, vice president finance and secretary of the company since coming aboard in October 2005.

Williams also is a certified public accountant. Prior to joining Car-Mart, his experience included approximately seven years in public accounting with Arthur Andersen & Co. and Coopers and Lybrand in Tulsa, Okla., and Dallas.

Williams’ experience also includes approximately five years as chief financial officer and vice president of operations of Wynco, a nationwide distributor of animal health products.

“Jeff has been with the company for 12 years now and has proven himself very capable of leading our efforts,” Henderson said.

Williams added, “I, too, am very excited about our future and look forward to helping the company grow as we support our customers by providing a higher level of service than competitive offerings.”

Editor’s note: More details about Car-Mart’s results and executive transition will be coming in a future story from BHPH Report.

Advice for identifying risk as you build your portfolio

In the current issue of BHPH Report, we discussed what we classified as the “eight risk questions that might keep you up at night.” We spelled out each of those questions here.

Well, now let’s try to provide you some answers to those difficult questions so you can rest better. Let’s begin with how can we better identify risk as a buy-here, pay-here dealership?

Every approval model has, as a way of disclaimer, an accuracy percentage attached to it. The likelihood of someone going bad is known before approval, depending on which segment of the approval model they belong. If one decides to dip into the fifth decile of an approval model, which has 35 percent bad rate, versus only the second decile, which has only 10 percent expected bads, they will have also done the profiling to differentiate the bads in the fifth decile.

Therefore, if operators accept them into their books, the dealerships also have to be ready to manage them so that they can act as soon as the account starts to show signs of future misbehavior. This is a passive strategy.

An active strategy goes even further as to “shape” or train the right behaviors of those likely to be bad. Usually, this is the perfect hand off of the accounts from the approval model to the portfolio management models.

Once approved, knowing which accounts under management would most likely go “bad” is critical to managing the good. Early detection warrants immediate action.

What an advantage it would be to stand at the door of credit approval as hundreds of new accounts are scored and on-boarded.

As an account passes through various phases such as approval, activation and management, some go delinquent while others continue to repo or charge-off. From simply an origination score perspective, approvals have a known risk factor. Many origination scores predict the percentage of loss associated with a specific approval score band.

What we see however is fewer and fewer operators are assessing continued correlation between score bands and loss rates. Additionally, we also have to be prepared to ratchet up intensity levels of a work treatment strategy as accounts age based on its risk score.

Not only will we be able to assess portfolio quality this way but also a much more strategic approach to capacity and staffing.

Early risk modeling and performance scoring was a function of past historical payment experience, with some help from credit reporting data. Typically good data for new account approval but what we are talking to here is:

—Analyzing projected risk


—Course adjustments based on risk stratification.

Clustering known elements of risk attributes to deploy pre-established workflow strategies is critical to diverting known high loss potential accounts into unique queues so that they are worked with more efficiency, tracked by results and ultimately provide retrospective feedback as part of the risk artificial intelligence models.

Greg Shelton is president at Partners Consulting, a management consulting firm specializing in operational assessments, workflow reviews and strategic planning for management teams in the accounts receivable management industry. Maria Singson is president and chief executive officer of, which offers risk and marketing analytics to help companies target profitable segments mitigate risks. Shelton can be reached at (678) 575-1136 or Singson can be reached at or (908) 499-4037.