This week, Darwin Automotive announced that it has been selected by Ford Protect to be a preferred provider within the company’s core F&I menu, as well as the Darwin digital retailing and service menu for Ford Dealerships nationwide.
Dealerships use the Darwin technology platform to deliver a personalized, effective customer experience and to rate, contract and remit F&I contracts electronically.
Darwin Automotive currently supports more than 154 different product providers and, as a preferred provider, Ford Protect will promote Darwin Automotive to its dealers. Ford Protect dealers will also receive national discounted pricing for all of Darwin Automotive products as part of the relationship.
“We are excited to have Darwin as a preferred provider for Ford and Lincoln Protect dealers. Darwin's menu, tablet and digital retailing experience products reflect an understanding of dealership operations and help support a dealer's existing F&I processes,” Ford and Lincoln Protect U.S. operations manager Steve Lopez said.
Darwin currently operates in all 50 states. More than 4,000 dealerships nationwide have enrolled in Darwin Automotive’s F&I software, which is endorsed by several top F&I product companies, agencies and OEMs.
“We are thrilled to be a preferred provider to Ford Protect, because they truly understand the importance of an integrated shopping experience,” Darwin Automotive chief executive officer Phillip Battista said.
“This relationship enables their dealers to educate customers and sell F&I protection wherever they choose to engage with the dealership, placing them at the front of the digital retailing game. It adds value for their customers while generating profitable income,” Battista added.
For more information or to schedule a product demonstration, call (732) 781-9010 or visit www.darwinautomotive.com.
Celebrating its 50th year in the consumer lending market, Carleton looked to enhance its suite of solutions this week.
Following extensive market feedback and discussions with key partners, Carleton released CarCalcs, a comprehensive and integrated sales tax, registration and dealer fee application programming interface (API) to complement its CarletonCalcs solution.
The company reiterated CarCalcs was designed to be an easy and flexible integration for any platform provider in order to connect and populate dealer administration settings. The application’s ease of use is designed to allow for the seamless onboarding of a dealer and real-time access to registration and dealer fee values. The data returned from the API is delivered in a format easily consumed by the CarletonCalcs payment computation module for the precise calculation of retail sales or leases.
These computations can provide the following:
• Sales tax rates by state, city and county
• Sales tax basis including settings for fees and down payments
• Registration fee based on vehicle information
• Dealer fee default amounts by state, including documentation fees
• Finance company and DMS default computation settings
• Ability to compute payment and deal information in a single call
The CarCalcs sales tax and dealer fee API integrates with the title and registration product from Automotive Titling Corp. (ATC) to generate a comprehensive single data channel delivery service. ATC provides automotive sales tax and registration fees in all 50 states.
“For over two decades, ATC has processed thousands of transactions through DMVs all over the country. This has facilitated our ability to build, catalog and uniquely authenticate the most accurate sales tax and registration fee database in the industry,” ATC president Ken Alley said. “Our authentication process is a full-time focus of our expert team”.
The moves were made in light of the vehicle-buying process shifting to a consumer-driven digital marketplace. As a result, Carleton stressed that dealers and finance companies now need their digital retailing platform to support lending regulations nationwide.
Company leadership insisted the combination of Carleton’s loan and lease payment calculation engine, Carleton’s compliant state-driven dealer fee data base, and ATC’s sales tax and title registration data, has resulted in a comprehensive and accurate payment solution.
“We saw a critical need for additional components to calculate accurate payment computations. This was the impetus for developing CarCalcs. Through our partnership with ATC, we have expanded our calculation offerings to include sales tax and registration fees,” Carleton Matt Ruszkowski president and chief operating officer said.
“We knew we needed a partner with the same level of expertise as our proven calculation services. Partnering with ATC was a logical decision,” Ruszkowski added.
Two providers that finance managers might already know and use are now working together.
StoneEagle F&I and F&I Express have agreed to integrate their solutions to provide dealers seamless access to the industry’s largest network of aftermarket providers, making it easier and simpler to present and sell value-added options to vehicle buyers.
The companies explained dealers using StoneEagle F&I’s SEcureMenu will now be able to digitally access F&I Express’ network of more than 160 aftermarket product providers, representing a wide range of offerings including extended warranties, maintenance plans and GAP insurance.
The companies added the integration will enable StoneEagle F&I users to take advantage of F&I Express eRating and eContracting, speeding the sale and reducing errors by digitally processing aftermarket products.
With margins tightening and sales flattening, both StoneEagle F&I and F&I Express acknowledged that aftermarket products can provide a way for dealers to maintain profitability and strengthen long-term customer connections. However, they added that a strong network of providers is critical to give customers options that work for their needs and budgets.
Executives also pointed out that a simple and efficient sales process is also key. Vehicle buyers are already frustrated with the time spent negotiating or doing paperwork at the dealership, with less than half satisfied with how long the process takes, according to the 2018 Cox "Automotive Car Buyer Journey" study.
“The StoneEagle F&I integration with F&I Express is a huge milestone, because it enables our dealer clients to provide their customers with fast, easy access to every major product provider,” said Buddy Rosenberg, senior director of product innovation for StoneEagle F&I.
“It opens new opportunities for our dealers to provide their customers with more choice and less frustration by using a seamless, digital F&I process for aftermarket products,” Rosenberg continued.
The collaboration brings together two major powerhouses in the F&I process to improve the vehicle-buying experience for all parties involved — dealers, aftermarket providers and consumers. It also enables the F&I Express provider network to reach StoneEagle F&I’s client base of more than 5,000 dealers throughout North America.
“We have a deep respect for the StoneEagle F&I team and how they serve their dealers and partners in our industry,” said Gary Peek, vice president and general manager of F&I Express.
“The relationship allows F&I Express to extend our solutions to more dealers so that we can help them increase sales, efficiencies and customer satisfaction — all adding up to a better, more profitable car-buying process,” Peek went on to say.
GSFSGroup has a new leader.
The provider of F&I products, training, dealer development and reinsurance structures to the automotive industry named Guy Koenig as president in a move that was effective on Feb. 27.
Throughout his professional career, GSFSGroup highlighted that Koenig has focused on sales and account management, reinsurance, operations, compliance and legal functions for all warranty segments including auto, consumer products, direct to consumer and heavy equipment.
An F&I professional with more than 20 years of experience, Koenig most recently served as president of AFG Companies, which is a part of CareGard Warranty Services. Prior to his role at AFG, Koenig served as chief strategic officer for AMT Warranty Corp., a subsidiary of AmTrust Financial Services, and director of business development and operations for General Fidelity Insurance Co., a Bank of America subsidiary.
“I look forward to building upon the strong foundation my predecessors have laid, and to better understand our challenges and opportunities as we work together as one team to meet our clients’ needs and take GSFSGroup to even greater heights,” Koenig said.
An F&I provider that’s been in business for more than 30 years has new ownership.
Kingsway Financial Services on Tuesday announced it has closed on its acquisition of Geminus Holding Co., a specialty, full-service provider of vehicle service contracts and other F&I products to used-vehicle buyers around the country.
Geminus, headquartered in Wilkes-Barre, Pa., has been creating, marketing and administering VSCs and F&I products on high-mileage used vehicles through its subsidiaries — Penn Warranty Corp., and Prime Auto Care — since 1988. Penn and Prime distribute these products via both independent and franchised dealerships.
“As previously communicated, a key component of our business strategy is to actively pursue compelling warranty company acquisitions. We are delighted to add Penn and Prime to our growing portfolio of businesses in the extended warranty industry," Kingsway Financial Services president and chief executive officer John Fitzgerald said in a news release.
“We think very highly of Jude Tuma and the entire Geminus team and feel that, with Kingsway’s resources and support, Penn and Prime have attractive business prospects,” Fitzgerald continued. “We expect the transaction will be immediately accretive to our cash flow and operating income.”
Tuma, who is Geminus’ chief executive officer, added, “We have spent many years building a strong brand and reputation that consumers can depend on. We look forward to joining the Kingsway family as we continue to build our reach and protect our customers’ valued assets.”
According to Protective Asset Protection, experts estimated that dealerships leveraging a dealer-owned warranty company structure to sell F&I products are seeing a 20-percent lift in profits on average for F&I sales.
Protective Asset Protection has focused on this topic significantly during the past year since many dealers have offset the recent downward trend in vehicle margins through increased F&I profitability. The company explained that a way some dealers have maximized their F&I income is through participation in the underwriting profits on the F&I products sold.
A number of structures exist for the dealer to participate in these products — each with varying benefits.
Protective Asset Protection explained that typical types of F&I products available for dealer participation include extended vehicle service contracts, GAP waivers and road hazard tire coverage, among others. The profit participation programs typically include guaranteed retrospective (retro) agreements, participating retro agreements, and insurance and reinsurance programs, including dealer-owned warranty companies (DOWC), controlled foreign corporations (CFC) and noncontrolled foreign corporations (NCFC).
Protective Asset Protection vice president Matt Gibson recently offered an in-depth analysis, reviewing the process for dealers transitioning their business from NCFC to DOWC because of federal tax law changes. Gibson also discussed the topic during a recent episode of the Auto Remarketing Podcast.
The company emphasized the importance of this strategy, reiterating that dealership margins keep shrinking. Protective Asset Protection pointed out these data points:
• The average U.S. light-vehicle franchise dealership lost $2 on every used vehicle it retailed in 2017.
• NADA Data 2017 figures: The average dealership saw a net loss of $2 per used vehicle retailed, swinging from a per-unit profit of $65 in 2016 and $132 in 2015.
• NADA Data’s numbers show that domestic-brand dealerships posted a net profit of $159 per used-vehicle sale. Volume import-brand dealerships posted a net loss of $111, and the average luxury-brand dealership posted a net loss of $197 per vehicle retailed.
“Dealer-owned warranty companies enable dealers to tailor and customize their own F&I offerings. For example, an independent dealer can build a portfolio of F&I products that caters to a variety of branded vehicles, not just one. These F&I products can range from service contracts to ancillary products,” Protective Asset Protection said.
“Given the fact that most dealers are entrepreneurs, with some even owning their own dealership, a DOWC will feel natural to them since it’s their opportunity to offer an F&I product that is merely an extension of the brand they’ve worked hard to establish within their own communities,” the company went on to say.
For more details about setting up a DOWC and more, go to www.protectiveassetprotection.com.
Whether it’s during company conference calls or coffee-shop chatter, many individuals with an interest in auto financing are keeping a close watch on this tax season, especially in light of the longest government shutdown already unfolding to begin 2019 and elected lawmakers continuing to squabble to keep agencies like the Internal Revenue Service fully functioning.
Credit Acceptance senior vice president and treasurer Doug Busk gave a frank answer even before the latest IRS data available showed how much softer this tax season already is at least in the opening stages.
Busk began his reply to an investment analyst’s question during the company’s latest conference call on Jan. 31 by saying, “I don’t think we really know.
“There’s a lot that has been written about potential delays due to the government shutdown. There’s been a lot written relative to the size of refunds versus what consumers have historically received. We don’t know what’s going to transpire so we’ll deal with it when it comes,” Busk continued.
According to the latest statistical update posted by the IRS as of Feb. 1, the tax collector has processed 13.3 million individual tax returns. That’s down by 25.8 percent year-over-year.
And as of that update, the IRS has pushed out $8.5 billion in refunds; a figure 30.3 percent lower year-over-year.
Furthermore, the IRS said the average refund for filers so far this tax season dropped below $2,000, coming 8.8 percent lower than the same juncture a year ago at $1,901.
Perhaps, an element skewing the data a bit is the fact that by law, refunds 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.
The stage already was set for a complicated tax season long before uncertainty over whether or not the federal government will be funded and fully open for business after the stopgap action taken by President Trump and Congress expires Friday. Cox Automotive research manager Zo Rahim explained the situation after a press conference at NADA Show 2019 in San Francisco.
“We estimated that the tax withholding tables were adjusted aggressively and withholdings have adjusted by a larger percentage than the tax rate change implied. There is a fraction of the population that they could see an average refund smaller than they received previously. If they thought they were going to get the same level, they might not this year,” Rahim said.
“Consumers might have to owe more than they previously had. If you’re thinking, ‘I might get a refund,’ and it’s smaller, they might change your consumption pattern. And if you owe, and you don’t have money saved up because you thought you were getting a refund, that could have an impact on consumption,” he continued.
“We want to stress that not everyone is going to have this impact, because remember there are 100 million plus tax filers in the U.S. But even, if it’s 1 or 2 million, if that happens to them, it could have trickle impact,” Rahim went on to say.
If consumers have less money to put toward a down payment or perhaps get an account out of delinquency, those circumstances could trigger even more tightening of underwriting; a trend Rahim and the Cox Automotive team were already expecting.
“In 2015, we saw pretty loose credit, and then we saw some tightening in ’16, ’17 and the first part of ’18. But then in the second half of 2018, we saw, specifically in subprime, lenders get more aggressive,” Rahim said.
“What this means is the interest rate they were charging versus the Fed funds rate, that spread decreased, meaning they took money off the table to chase that subprime borrower and get them into a vehicle,” he continued. “We know that’s not sustainable, because you can’t sustain growth on subprime. We made that mistake once. I don’t lenders are going to make that mistake again.
Rahim went on to say, “2018 was a very weird year. I think lenders made one last effort to push as many sales as they could because the retail market is declining.”
While tax season might be full of uncertainty, the situation might be part of the reason why the Federal Reserve is not as active in 2019 as it was a year ago. Policymakers already passed on their first chance of the year to raise interest rates after increasing them four times in 2018.
The Fed meets again on March 19 and 20.
Coming into this year, we thought there maybe three hikes in 2019 after there were four in 2018. But recent stock market volatility plus some concerns about China and Europe and what oil is doing, it looks more like we’re looking more like one or two rate hikes,” Rahim said during the NADA convention in late January.
“We don’t think there is going to be a rate cut environment. Some were talking that the volatility in December means we’re going to have cuts in 2019. But if you look at the stock market now, things have rebounded. They’re starting to look better. There isn’t much that suggests that the Fed is going to be aggressively like they were in 2018. Four hikes, I think is off the table,” he went on to say.
All of the metrics Westlake Technology Holdings shared about its 2018 performance headed in directions that would please just about any executive team or board of directors.
And the company already is aiming for double-digit improvement this year.
The company recently announced its portfolio grew 35 percent in 2018, finishing at an all-time high of $8.33 billion in assets under management. Executives highlighted that core automotive indirect financing originations and a reduction in net loss percentage contributed to this growth.
Westlake said its core indirect financing operations delivered 40.5 percent growth over 2017, while 31-plus-day delinquency dropped by 9.0 percent. The company calculated these reduced delinquencies led in part to a 5.6-percent decline in net losses as a percent of total assets.
Westlake mentioned its 2018 mix of originations continued to move toward a more full-spectrum portfolio, as near-prime and prime credit tiers (defined as contracts with FICO scores of 600 and higher) represented 40.5 percent of 2018 deals.
Westlake Technology Holdings group president Ian Anderson said, “2018’s success was made possible by our outstanding employees, implementation of the latest technology and the commitment to achieving our goals.
“For 2019 we project another strong year with increased growth and market share across all our companies,” Anderson added.
Besides indirect financing, Westlake Financial’s other companies saw tremendous growth as well, including:
— Western Funding ended 2018 with 76.6 percent year-over-year growth, a 12.5-percent reduction in 31-plus-day delinquencies and a 18.4-percent drop in net loss percentage.
— Wilshire Consumer Credit decreased its 31-plus-day delinquency by 17.8 percent with a 13.2-percent drop in net loss percentage.
— Credit Union Leasing of America (CULA) grew 29.5 percent this past year.
— Westlake Flooring Services grew 33.0 percent year-over-year with a 69.5-percent reduction in 1-plus-day delinquency and 79.1-percent drop in net loss percentage.
Furthermore, Westlake’s newest company, Westlake Portfolio Management (WPM), enjoyed strong first-year success with $350 million in portfolio servicing of active and inactive accounts.
Westlake chief financial officer Paul Kerwin said, “2018 was a great year for us, because we increased market share while maintaining profitability.
“We set aggressive goals, and our employees did an amazing job executing the plan,” Kerwin went on to say.
For 2019, Westlake Technology Holdings said it is targeting 20-percent growth over 2018 and expansion of its direct lending platform on LoanCenter.com.
Dealerships interested in learning more about Westlake Financial Services are invited to contact Westlake directly at (888) 893-7937 or online at www.westlakefinancial.com.
Effective immediately, Matt Ruszkowski has been named president and chief operating officer of Carleton, a provider of compliant consumer loan calculations and lending document generation software.
A company news release indicated Ruszkowski will lead Carleton’s experienced executive leadership team toward continued growth and the introduction of new software and services in the lending industry.
“It was important that the next Carleton President demonstrated leadership and our core company values in how he interacts with employees, prospects and clients. Matt’s leadership has continually exhibited these core values, and he understands the unique market value of our products and expertise in today’s financial services marketplace,” said Pat Ruszkowski, Carleton’s chief executive officer.
Matt Ruszkowski has worked in the consumer lending industry for the last 18 years. His business background includes new business development, sales, operations management, and customer and product support. He also led the company’s effort in establishing an automated operational framework which resulted in streamlined client support, enhanced sales and production management, and SOC2 audit compliance.
“Carleton has undergone continuous growth and successfully built upon its decades of experience in the lending industry with more than 150 integrated platform clients,” Pat Ruszkowski said.
“Matt has been a key part of our success over the last five years. This management change will assure Carleton continues its substantial momentum and retains its position as an industry leader. I am very excited about our future,” Ruszkowski concluded.
AUL Corp. recently promoted one of its managers who has been with the vehicle service contracts administrator for more than a dozen years.
According to a news release, AUL president and chief executive officer Jimmy Atkinson has elevated Deonna Frank to the position of manager of operations and cancellations. In her new role, Frank will report directly to Jose Fleites, the firm’s chief information officer, head of IT, operations and service support, and she will lead the operations, pricing and vision for Ocean, the firm’s proprietary operating system she helped implement.
In her new role, Frank will focus on evaluating procedures and functionality to improve efficiency.
According to Fleites, “Deonna has been part of the AUL family for more than 13 years and has been rising through the ranks due to her intelligence, technical savvy and unique ability to manage complex projects with ease. She was instrumental in the design and development of our new pricing and underwriting system and took the extra step to train other team members in its use.
“Her promotion is well-earned, and we will lean on her skills and experience to make Ocean the best it can be,” Fleites continued.
Frank spent the previous three years as a sales project team leader in the firm’s sales and reinsurance department. Prior to that, she held the positions of sales project coordinator and direct marketing manager.
Frank is a certified scrum product owner (CSPO), certifying her mastery of managing teams responsible for complex projects. AUL noted scrum falls within “agile,” which is the umbrella term for several strategic approaches to getting complex, innovative scopes of work done.
