Oftentimes, what buy-here, pay-here operators and their related finance company underwriters check when considering an applicant is their child support status and if they’ve maintained those payments.
A new TransUnion public sector analysis shed new light on how those child support activities appear on credit reports.
TransUnion reported two-thirds of delinquent child support payments remain in arrears 12 months after …
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Byrider used technology recently to upgrade the capabilities of its service department. The network of more than 150 buy-here, pay-here dealership locations also leveraged technology to enhance its collections.
While a partnership with Shopmonkey was for the service department, Byrider aligned with Lightico as its digitalization partner for front-end and back-end finance activities.
According to a news release, Byrider’s related finance company, CNAC, struggled to manage a part of its automotive account collections process efficiently. After switching to Lightico’s streamlined document request and eSignature solution, executive said CNAC saw immediate ROI, including:
• 84% of documents were returned by the customer (40% increase from previous solution)
• Turnaround time (TAT) shrank by 86%.
• TAT went from one week to less than one day
“The switch to Lightico has assisted us in lowering operating costs, improving associate productivity, and provided a more positive experience for our customers,” Byrider regional collection manager Timothy Brown said in the news release.
“With Lightico, our agents are able to focus on helping our customers at every stage of the journey in a fast and efficient way. This is key to providing a great customer experience to help them keep their accounts in good standing,” Brown continued.
Lightico’s Digital Completion Cloud is a no-code, mobile-first solution for companies that can enable completion of high-friction interactions with customers including originations and servicing.
Upon receiving the message, customers are able to sign forms and upload documents to a secure mobile (or desktop) session while on the phone with an agent.
“In 2022, it should come as no surprise that customers demand quick, easy and mobile interactions with every process they complete, including their car financing,”, at Lightico chief executive officer and co-founder Zviki Ben Ishay said. “Byrider has digitally advanced its processes significantly and the significant improvements in bottom-line results, efficiency and customer satisfaction are clear.”
XpressCredit, a fintech that focuses on the small independent auto dealer market, recently selected Lokyata’s BankAnalyze solution to help support contract decisioning for XpressCredit’s network of thousands of independent dealers nationwide.
XpressCredit is designed to provide users with one point of entry from unit acquisition to customer disposition, including consumer finance and accounting.
BankAnalyze can provide borrower-permissioned access to applicants’ alternative data, such as rent payments and bank statements, and utilizes the information to inform a credit decision based on individual finance company’s own rules and workflows
Through this partnership, dealers that leverage XpressCredit’s platform will have direct access to BankAnalyze’s functionality as part of the credit application and decisioning process, enabling them to provide more financing options to more potential vehicle buyers.
“Speaking for the whole XpressCredit team, I just want to say how proud we are to be partnering with Lokyata,” XpressCredit senior vice president of marketing Keith Bardwell said in a news release. “Through this integration, the XpressCredit platform can now provide traditional and non-traditional credit scorecards that enhance our product for our customer base.”
Lokyata chief technology officer Steve Bireley said, “With rates rising and auto prices remaining high, auto lenders need tools to better manage their loan decisioning and help their customers responsibly gain access to financing.
“XpressCredit has a deep understanding of the industry and a proven history of providing its dealer network with access to the latest technology, and BankAnalyze is a perfect addition to its dealer platform,” Bireley went on to say.
Tricolor Financial is now leveraging a tool from Digital Matrix Systems (DMS) so it can continue to improve as an artificial intelligence-driven, tech-enabled Community Development Financial Institution (CDFI) focused on providing auto financing for underserved Hispanic consumers.
This week, DMS announced that Tricolor has chosen to use CreditBrowser, a web-based data access tool that can provide clients with efficient access to credit reports delivered in an easy-to-read proprietary format.
DMS highlighted that CreditBrowser can eliminate the need for additional software, by enabling report access via a standard internet browser for an intuitive experience with streamlined navigation.
The company also pointed out that delivery of complete, accurate and easy-to-read credit reports can reduce errors and improve readability of business-critical information, which can empower clients to make the best possible underwriting decisions.
Tricolor will leverage CreditBrowser to access additional credit report data in support of its mission to provide affordable auto financing to underserved Hispanic customers.
Since Tricolor’s inception, the company has originated more than $1 billion in contracts.
“Digital Matrix Systems will be a great partner to us as we continue to evolve our lending platform and analytics capabilities,” Tricolor chief lending officer Nick Brown said in a news release.
“The CreditBrowser platform will enable us to easily expand our access to additional credit bureaus and other data sources, which we anticipate will help us manage risk effectively while also meeting the unique needs of our customer base,” Brown continued.
Digital Matrix Systems senior vice president of business development Carson York added in the same news release: “We’re excited to work with the team at Tricolor. We are proud to help them serve an underserved market and look forward to expanding our partnership as they continue to advance their use of both credit and alternative data sources.”
During a podcast recorded during the Vehicle Finance Conference hosted by the American Financial Services Association, Nick shared another conversation with Jennifer Reid, the vice president of automotive strategy and marketing at Equifax Automotive Services.
Reid revisited strategic recommendations to help dealerships and finance companies learn more about potential buyers from their credit reports than just their top-line score.
The full episode can be found below.
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Now that the government shutdown has been halted until at least Feb. 15, the Internal Revenue Service announced on Monday that it successfully opened the 2019 tax-filing season as the agency started accepting and processing federal tax returns for tax year 2018.
Despite the major tax law changes made by the Tax Cuts and Jobs Act, the IRS said it was able to open this year’s tax-filing season one day earlier than the 2018 tax-filing season.
As to what’s of particular interest to buy-here, pay-here, dealers, the IRS emphasized that refunds, by law, cannot be issued before Feb. 15 for tax returns that claim the Earned Income Tax Credit or the Additional Child Tax Credit. Officials said this stipulation applies to the entire refund — even the portion not associated with the EITC and ACTC.
While the IRS said it will process the EITC and ACTC returns when received, officials indicated these refunds cannot be issued before Feb. 15.
Similar to last year, the IRS expects the earliest EITC/ACTC related refunds to actually be available in taxpayer bank accounts or on debit cards starting on Feb. 27, if they chose direct deposit and there are no other issues with the tax return.
Officials added that the tool “Where’s My Refund?” on IRS.gov and the IRS2Go mobile app remains the best way to check the status of a refund. “Where’s My Refund?” will be updated with projected deposit dates for most early EITC and ACTC refund filers on Feb. 23, so those filers will not see a refund date on “Where’s My Refund?” or through their software packages until then.
“The IRS, tax preparers and tax software will not have additional information on refund dates, so these filers should not contact or call about refunds before the end of February,” officials said.
The agency reiterated this law was changed to give the IRS more time to detect and prevent fraud. Even with the EITC and ACTC refunds and the additional security safeguards, the IRS still expects to issue more than nine out of 10 refunds in less than 21 days.
“However, it’s possible a particular tax return may require additional review, and a refund could take longer,” officials said. “Even so, taxpayers and tax return preparers should file when they’re ready. For those who usually file early in the year and are ready to file a complete and accurate return, there is no need to wait to file.”
More than 150 million individual tax returns for the 2018 tax year are expected to be filed, with the vast majority of those coming before the April tax deadline. Through mid-day Monday, the IRS had already received several million tax returns during the busy opening hours.
“I am extremely proud of the entire IRS workforce. The dedicated IRS employees have worked tirelessly to successfully implement the biggest tax law changes in 30 years and launch tax season for the nation,” IRS commissioner Chuck Rettig said.
“Although we face various near- and longer-term challenges, our employees are committed to doing everything we can to help taxpayers and get refunds out quickly,” Rettig continued.
Following the government shutdown, the IRS is working to promptly resume normal operations.
“The IRS will be doing everything it can to have a smooth filing season,” Rettig said. “Taxpayers can minimize errors and speed refunds by using e-file and IRS Free File along with direct deposit.”
The filing deadline to submit 2018 tax returns is April 15 for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17 to file their returns.
The IRS expects about 90 percent of returns to be filed electronically.
“Choosing e-file and direct deposit remains the fastest and safest way to file an accurate income tax return and receive a refund,” officials said.
A financial services organization already with a long-standing relationship with NIADA recently expanded the partnership.
Home Loan Investment Bank, whose auto finance division offers a Preferred Dealer Referral Program to independent dealers throughout the country, has joined with the National Independent Automobile Dealers Association as its newest Bronze-level National Corporate Partner.
“Home Loan works with dealers to offer car buyers a unique value proposition: financing for any make, any mileage, any year,” Home Loan Investment Bank chairman and chief executive Brian Murphy said. “In addition to automobiles, we finance motorcycles, recreational vehicles and commercial vehicles. We offer loans for new and used vehicles as well as refinancing.
“We are excited about this opportunity to get to know NIADA’s member dealers and show them how a bank named Home Loan can help them sell more cars,” Murphy continued.
NIADA senior vice president of member services Scott Lilja said Home Loan’s 50-plus years of experience in the banking and lending business helps make the company a strong partner.
“Home Loan Investment Bank has developed very attractive lending solutions for our independent auto dealer members,” he said. “That helps address one of biggest challenges our members face — access to high quality, profitable, first-class service and auto lending resources.
“We look forward to helping Home Loan Investment Bank expand its presence in the independent auto retail market and bring best-in-class auto finance resources to our member dealers,” Lilja went on to say.
For more information, visit www.homeloanbank.com/auto.aspx or call (401) 773-9610.
Buy-here, pay-here dealers who already delivered vehicles based on expected federal tax refunds likely let out a collective sigh of relief stemming from an announcement the Internal Revenue Service made late on Monday.
Despite the government shutdown, the IRS confirmed that it will process tax returns beginning Jan. 28 and provide refunds to taxpayers as scheduled.
“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” IRS commissioner Chuck Rettig said.
The IRS explained Congress directed the payment of all tax refunds through a permanent, indefinite appropriation (31 U.S.C. 1324), and the IRS said it has consistently been of the view that it has authority to pay refunds despite a lapse in annual appropriations.
Although in 2011 the Office of Management and Budget (OMB) directed the IRS not to pay refunds during a lapse, OMB has reviewed the relevant law at Treasury’s request and concluded that IRS may pay tax refunds during a lapse.
The IRS indicated that it will be recalling a significant portion of its workforce, currently furloughed as part of the government shutdown, to work. Additional details for the IRS filing season will be included in an updated FY2019 Lapsed Appropriations Contingency Plan to be released publicly in the coming days.
“IRS employees have been hard at work over the past year to implement the biggest tax law changes the nation has seen in more than 30 years,” Rettig said.
As in past years, the IRS will begin accepting and processing individual tax returns once the filing season begins. For taxpayers who usually file early in the year and have all of the needed documentation, officials there is no need to wait to file.
“They should file when they are ready to submit a complete and accurate tax return,” the IRS said.
The filing deadline to submit 2018 tax returns is April 15 for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17 to file their returns.
Software companies and tax professionals will be accepting and preparing tax returns before Jan. 28 and then will submit the returns when the IRS systems open later this month.
“The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds,” officials said.
A company with its roots in the buy-here, pay-here space is continuing to expand an artificial intelligence-powered financial services platform serving Hispanic consumers.
Tricolor recently announced an exclusive agreement with Phenx Machine Learning Technologies. In early testing, Tricolor’s newly AI-enabled algorithm demonstrated enhanced underwriting accuracy and the ability to rapidly scale to score massive amounts of data records.
“Over the past decade, we have continued to refine our scoring methodology to accurately assess risk and responsibly extend over $900 million in affordable loans to subprime Hispanic customers,” said Daniel Chu, chief executive officer of Ganas Holdings, the parent company of Tricolor Auto Group.
“The addition of Phenx’s advanced AI into our algorithms immediately improved this accuracy and showed an ability to process massive amounts of additional data. We are excited to expand this work through this exclusive agreement and uncover even more applications for our platform,” Chu continued.
Headquartered in Dallas, Tricolor, together with its affiliate, Ganas Auto Group, operate 30 retail dealerships across 12 markets in Texas and California, as well as a shared services center in Guadalajara, Mexico.
Cincinnati-based Phenx Machine Learning Technologies develops deep learning algorithms that automatically can identify the core patterns hidden in data to help make smart business decisions. Tricolor has applied this technology to its credit scoring methodology which segments customers into six credit grades.
In early testing, the new AI-enabled algorithms were able to identify the quality loans in each segment for cleaner segmentation of loan and credit types. Based on these promising results, the two companies have entered into an exclusive agreement for financial services serving the Hispanic consumer.
“Because of its proprietary and market leading analytics to underwrite credit invisible consumers and its commitment to invest in technology, Tricolor is uniquely positioned to capitalize on AI solutions,” said Saurabh Sarkar, founder and chief executive officer of Phenx, who previously spent seven years as a vice president at JPMorgan Chase developing advanced models to support a $50 billion auto finance portfolio.
“We are enthusiastic that this partnership will not only result in significantly enhanced underwriting processes, but also accelerate Tricolor’s overall vision to become the premier financial services platform serving this niche consumer,” Sarkar continued.
Tricolor Auto Group in Texas and Ganas Auto Group in California, utilizing advanced data analytics and technology to advance financial inclusion to a highly underserved market, offer responsible, affordable, credit-building auto financing to individuals with no or limited credit history.
On a combined basis, Tricolor and Ganas have served nearly 50,000 customers and generated nearly $900 million in paper.
And that’s why Chu is upbeat about the development with Phenx.
“There are 45 million people in the United States whose lack of a credit score translates into limited options for financing major purchases such as a motor vehicle,” Chu said. “We are excited to be the exclusive Hispanic financial services partner for Phenx, and eager to apply their leading AI technology in service to our customers.”
This week, Equifax and the National Independent Automobile Dealers Association shared noteworthy results from their Q3 Auto Business Outlook, which stems from operators participating in a quarterly survey.
Equifax and NIADA highlighted that three general themes surfaced from the latest edition. Those elements included:
— Independent dealers remain optimistic heading into 2019.
— The buy-here, pay-here market shows growth.
— A continued shift is happening from new-vehicle sales and leases to used-car transactions.
Officials shared results from specific survey questions, including:
Overall, does your dealership expect economic conditions to improve, stay the same, or decline in the auto industry over the next quarter?
2018 Q3: 47 percent said they would improve
2017 Q3: 36 percent said they would improve
Does your dealership plan to expand its business over the next quarter? (add new equipment, enhance your building/property)
2018 Q3: 32 percent of dealers said yes
2017 Q3: 30 percent of dealers said yes
What percentage of the following categories makes up your total retail automobile sales?
2018 Q3: 37 percent in prime / 37 percent in BHPH / 26 percent in subprime
2017 Q3: 39 percent in prime / 33 percent in BHPH / 28 percent in subprime
Do you anticipate your dealership’s retail sales to grow, stay the same or decrease over the next quarter?
2018 Q3: 56 percent said they would grow, while 36 percent said the same and 8 percent suspect a decrease
2017 Q3: 55 percent said they would grow,while 34 percent said the same and 11 percent suspect a decrease
When it comes to factors contributing to more difficulty for dealers to secure loans for their customers, operators cited the following:
40 percent: tighter restrictions to qualify buyer loans (credit tiers)
25 percent: less access to number of lenders
25 percent: worsening terms affecting ability to effectively compete with franchised dealers
14 percent: more verification of buyers’ background (employment, income, residence address, etc.)
While 2016 was a record-setting year for new-car sales, Equifax pointed out that at the midway point of 2018, used-vehicle sales are continuing a shift that started last year and are on pace to match a strong 2017.
Analysts indicated the shift to used vehicles is also behind an increase in loans and a decline in the leasing market. Equifax noted that the nearly 2 million auto leases, totaling $32.4 billion, originated through the first half of 2018 reflects a 1.2-percent decrease in accounts and a 2.9-percent decrease in balances from the same period last year.
Equifax added that new-model leases accounted for only 13.8 percent of all auto accounts originated through June and 10.4 percent of balances.
Gunnar Blix, deputy chief economist for Equifax, explained that despite a pace of new sales that is slightly off the record-setting mark of 2016, car shoppers overall are financing more — a clear reflection of the continued increase in the price of cars and trucks and the starting impact of rising interest rates.
“We see the shift from new-vehicle sales activity to more used vehicles continuing, largely because the shopper knows the price of autos is going up, and they realize they can find bargains on slightly used, off-lease vehicles that are readily available,” Blix said. “Interest-free loan and lease incentives are also becoming few and far between.”
