The streamlining of financing is happening in the subprime space, too.
RouteOne announced on Monday that Exeter Finance is now an available eContracting finance source for dealers utilizing the RouteOne platform. Officials reiterated eContracting can enable the digital exchange of critical contract documents and data between dealers and finance sources to increase efficiency and reduce contracts in transit.
RouteOne is one of the industry leaders in eContracting, booking more than 8.2 million eContracts to date. RouteOne has more than 6,600 active eContracting dealers that have access to more than 40 finance sources to deliver a variety of financing options. The availability of these finance sources has led to notable growth in RouteOne’s non-captive eContracting share which has more than doubled every year since 2014.
“As eContracting becomes the standard, and not the exception when financing a vehicle, RouteOne’s goal is to make this service available for all financing scenarios,” said Jeff Belanger, RouteOne’s senior vice president of business development. “The demand from dealers is present and we anticipate our integration with Exeter Finance will continue to accelerate eContracting growth.”
Exeter Finance offers personalized service and flexible financing options for credit challenged customers through thousands of franchised dealers nationwide.
“At Exeter, we are continually looking for ways to enhance our dealer experience,” said Brad Martin, Chief Operating Officer at Exeter Finance. “With the addition of eContracting, our dealers should see a decrease in returned contracts and faster funding times.”
Back in October, New York Mayor Bill de Blasio signed a package of legislation giving the city’s Department of Consumer Affairs (DCA) additional regulatory muscle to combat what officials described as “predatory financing practices in the used-vehicle industry.”
While those new laws go into effect in February, DCA already showed it’s ready to flex its power, finalizing settlement agreements last week with three auto finance companies that specialize in subprime paper — Credit Acceptance Corp., Clover Commercial Corp., and Westlake Financial Services.
The settlement is associated with contracts containing rates as high as 24.9 percent booked through a group of Brooklyn independent dealerships. In total, DCA secured $311,260.57 in restitution for 50 consumers.
In May, DCA charged the dealerships — USA1 Auto Sales, Lenden Used Car Sales, D&A Guaranteed Auto Sales and Linden Used Cars — and their owners with deceptive and unlawful trade practices, including misleading consumers about the price of vehicle, concealing and misrepresenting the terms of sale and financing and failing to inspect the vehicles.
Officials explained Credit Acceptance, Clover Commercial and Westlake Financial Services have agreed to:
— Reimburse $311,260.57 to 50 consumers who were in high-interest agreements with the dealerships and whose contracts were assigned to the finance companies. Consumers who owe money will receive a credit to their account and any amount beyond what is owed will be paid via check. Consumers who no longer owe any money will also receive a check
— Provide restitution to eligible consumers who file new complaints about USA 1 Auto Sales, Lenden Used Car Sales, D&A Guaranteed Auto Sales and Linden Used Cars before March 11, allowing even more consumers the opportunity to benefit from the agreements
— Safeguard consumers by requesting that consumer reporting agencies delete any negative information that was reported in an effort to help repair the consumers’ damaged credit
DCA encouraged consumers who allegedly were harmed by these dealerships to file a complaint before March 11 so that they can potentially be included in the settlements and receive restitution.
“Thanks to DCA’s efforts, all three financing companies have agreed to pay restitution to consumers who were burdened with exorbitant interest rates on loans they received through these deceptive dealerships,” DCA commissioner Lorelei Salas said.
“The city will not tolerate predatory financing and sales practices. We will continue to hold dealerships and financing companies accountable in an effort to protect innocent New Yorkers from purchasing unusable cars and loans that place excessive financial burdens on themselves and their family members,” Salas continued.
DCA currently licenses 666 dealerships and has received nearly 5,800 complaints from consumers about dealerships during the past four years. Officials indicated the complaints range from instances of forgery on contracts to a dealership’s failure to provide material disclosures to consumers.
As a result of the mediation of consumer complaints, investigations and settlements, DCA has secured more than $2.7 million in consumer restitution and assessed nearly $1.8 million in fines against dealerships over the past three years.
In March, DCA announced charges against Major World, one of the largest independent dealerships in the city with multiple locations in Queens, for engaging in deceptive financing and sales practices that resulted in predatory financing targeting immigrants and New Yorkers with low incomes. Enforcement is one prong of DCA’s efforts to combat these predatory practices, which also includes education and advocacy.
And as mentioned earlier, New York’s mayor got into the fray during the fall as the laws de Blasio signed require dealerships to post a Consumer Bill of Rights and to disclose other information about the vehicle price and financing terms; provide required notices to the consumer in the language used to negotiate the contract; and provide consumers with the option to cancel their contract within two business days of the sale.
This package of legislation was introduced by council member Rafael Espinal Jr., chair of the council committee on consumer affairs, council member Dan Garodnick, and council member Jumaane Williams, following a public hearing hosted by Salas and Espinal.
This week, vehicle service contracts administrator AUL Corp. announced the hiring of Paul Leary to be the business development manager for the company’s Central Region.
According to Jason Garner, senior vice president of sales and business development of AUL Corp., Leary will be operating from Columbus, Ohio, and will be responsible for working with agents and dealers to maximize the company’s growth within a 12-state territory.
The company highlighted Leary brings 25 years of automotive and warranty experience to AUL, with his first 20 years spent in various capacities at GE Capital Warranty Division where he was instrumental in the growth of the business.
During the past five years, Leary has held leadership roles in operations and sales within the VSC industry. Garner highlighted this level of knowledge gives Leary the unique ability to respond quickly to customers’ needs and help them identify and create profitable solutions for their dealerships.
“Paul is the perfect fit for AUL Corp’s Central Region efforts. Not only is he a man of great integrity, he has the great ability to build strong relationships with agents and other important clients,” Garner said.
TrainAndCertify.org, which offers education programs for sales and customer service reps in various consumer-centric industries, on Thursday announced the availability of its Certified Vehicle Protection Professional (CVPP) certification program.
TrainAndCertify.org explained that it established the CVPP program via the Academy of Certified Vehicle Protection Professionals (ACVPP) to recognize individuals who demonstrate the requisite knowledge required to responsibly and effectively market vehicle service contracts (VSCs) to consumers.
TrainAndCertify.org has also produced and launched a branded version of the CVPP certification program for the vehicle service contract industry trade association Vehicle Protection Association (VPA) and its member companies.
“We’re excited to introduce the new CVPP certification that was created with VSC industry experts to accurately validate the very specialized industry knowledge and skills of sales and customer service employees of vehicle service contract marketers,” said Laurence Larose, president of TrainAndCertify.org.
“Professionals are looking for a way to demonstrate and promote their skills by earning a certification that is a distinct indicator of their deep industry knowledge and VSC marketing companies also benefit from the rigor and integrity of the CVPP training and exam process,” Larose continued.
Vehicle service contract sales and customer service professionals who would like to be CVPP certified must complete the online CVPP training module and certification exam.
More details can be found at TrainAndCertify.org.
Perhaps finance providers that do not have as much margin for risk as other market players see businesses as a safer bet than consumers in the auto-finance space.
New analysis from White Clarke Group that looks ahead to what might happen in 2018 showed that the re-emergence of small and regional banks looking to expand services to existing manufacturers, dealers and retailers is continuing to spur growth in the floorplan finance market.
White Clarke Group reasoned that this trend is providing opportunities for many traditional finance companies and other lenders looking to diversify their businesses and expand into wholesale, with growth expected to continue throughout the year.
Kurt Ruhlin, chief operating officer at White Clarke Group, emphasized that finance companies also are fast realizing that the necessity for the right system partner to help them get to market quickly with low operating costs is imperative.
Ruhlin insisted the key is finding a scalable solution that can provide an economical yet reliable, future-proof system to fit both the current size and growth of their businesses.
“We have seen a surge of expansion in the market and a need to increase operational efficiency,” Ruhlin said. “As a result, many new or expanding wholesale lenders have selected the CALMS Compass wholesale platform to fulfill their needs.
“The need for a quick to market system has become critical, and the out-of-the-box functionality has allowed for many new implementations to go from decision to live in less than 90 days,” he continued.
Ruhlin went on to note that new compliance and regulatory requirements are also playing a pivotal role in the emergence of start-ups, small companies and manufacturer captive lenders, which find it easier to raise capital due to their flexibility.
More analysis from White Clarke Group is available here as well as through this video summary that’s also in the window at the top of this page.
Space Coast Credit Union — with more than 380,000 members and assets of over $3.9 billion — recently announced the appointment of Hilary Eisbrenner to be chief financial officer and senior vice president.
A 27-year veteran of the credit union industry and certified public accountant, Eisbrenner joined SCCU as vice president of finance and accounting in early 2016, bringing experience across multiple fields of finance, information technology and asset liability management.
Eisbrenner has provided immediate value during her short time at the credit union, including mapping and balancing systems data in preparation for SCCU’s core system conversion last fall and completing a complex CPA audit.
“Hilary was chosen for this role because she is able to dig in and do what it takes to get the job done,” SCCU president and chief executive officer Timothy Antonition said. “Her knack for explaining financial concepts in non-CPA speak is hard to find. With this unique trait, she has become a trusted adviser regarding the credit union’s financials, and I look forward to continuing to work with her.”
In addition to continuing to oversee and direct financial operations, Eisbrenner assumes responsibility of the credit union’s collections area and enterprise risk management. Eisbrenner will continue to work closely with the credit union’s leadership as part of the executive management team to advance the credit union’s mission of creating value in cooperative ownership and protect members’ financial interests.
Now that the Thanksgiving turkey has been devoured and the holiday season is in full swing, EFG Companies is looking ahead to 2018, offering its predictions and recommendations for the retail automotive and powersports F&I market.
Company leaders highlighted these insights, formed through thousands of conversations with the nation’s leading dealership principals and finance companies, reflect another year of cautiousness on the horizon. However, EFG Companies insisted there are many options for dealers, finance companies and agents to navigate an uncertain business climate successfully for a prosperous 2018.
“2017 has been one eventful year. We’ve seen three rate increases so far from the Federal Reserve. The CFPB’s influence has been curtailed by Congress and the current Administration. While new unit sales have flattened, the effects of the hurricanes in Southeast Texas, Florida and Puerto Rico — and the California wildfires — loom large,” EFG Companies president and chief executive officer John Pappanastos said. “For the retail automotive and powersports industries, we’re still seeing a holding pattern,” Pappanastos continued while adding, “2018 sales volumes are expected to be roughly the same as 2017, barring any significant economic fluctuations.
“The challenges and opportunities ahead will largely revolve around customer retention, building up the service bay, and leveraging changing consumer trends to foster market differentiation,” he went on to say.
Here is the rundown of the five wide-ranging predictions EFG Companies recently shared:
1. Retail sales to see marginal uptick strained profit margins and increased focus on customer retention.
John Stephens, who is executive vice president of dealer services, insisted OEMs learned a big lesson in 2017. Today’s consumers want SUVs and CUVs.
“As manufacturers update their vehicle line-up, we should see slightly more new unit sales in 2018 than we did in 2017, but not significantly,” Stephens said. “The trend of rising vehicle prices will only continue. Combined with manufacturer incentives, dealer front-end margins will continue to be strained. As such, dealers will increase their focus on their F&I operations from both an up-front profit and a customer retention standpoint.
“Expect dealers to retool their product menus and F&I pay plans based on products that encourage consumers to return for service,” he continued. “In addition, dealers will put an even greater emphasis on their service drive to better utilize their time with the customer and enhance their ongoing communication.
“In this same vein of consumer communication, we’re seeing more dealers becoming open to listing F&I product benefits online as a way to speed up the F&I process, increase consumer interest in available benefits, and increase product penetration rates,” Stephens added.
2. Acquisitions and engagement will be the name of the game for agents.
Going into a second year of relatively flat unit sales, vice president of agency services Adam Ouart explained that agents are already becoming much more engaged with dealerships on a day-to-day basis, and are focusing more of their efforts on increasing their dealership client base.
“In their acquisitions efforts, agents will be much more circumspect and selective when it comes to approaching dealers,” Ouart said. “There will be an increased competition among agents for those higher-volume dealerships, which will force agents to differentiate themselves based on more than just products.
“Strategic agents will take a more engaged approach to both servicing and acquiring clients, identifying needs, providing training, product menu updates, pay plan guidance, recruiting support, pre-owned inventory analysis, and even providing compliance services,” he continued. “This holistic approach will separate the high performing agents from their peers.”
3. Growth potential for finance companies that leverage today’s economic and consumer trends
Even with rising delinquencies and flat vehicle sales, vice president of specialty services Brien Joyce pointed out that economic indicators continue to be strong.
“As more consumers delayed making their next vehicle purchase in 2017, the pent-up demand will begin to unfurl in 2018 — especially as SUVs hit the market,” Joyce said. “With this in mind, there is growth potential for the auto lending environment in 2018.
“To get in front of more consumers, we’ll see lenders increasing their direct-to-consumer auto lending marketing spend. They’ll also shore up their dealership relationships by buying more aggressively when possible, scheduling ongoing in-dealership meetings at least once a week, and reviewing profit metrics with dealership leadership once a quarter,” he continued.
“In addition, lenders will evaluate other solutions to both protect their loan portfolios and enhance their market differentiation for consumer protection products,” Joyce added.
4. Growth challenges continue for powersports dealers.
Vice president of powersports Glenice Wilder acknowledged the powersports industry saw similar challenges as the automotive industry in 2017.
“Unit volume did not hit projections and we’re seeing more dealers sell inventory at or below costs just to keep it moving. To recoup this lost profit margin in 2018, dealers will be evaluating how to drive as much traffic their way as possible, and how to increase customer retention,” Wilder said.
“We will see more powersports dealers use F&I products to meet both goals,” Wilder continued. “They’ll focus their product menus and pay plans around those products that differentiate them in their given market and encourage repeat business in the service bay.
“In addition, consumer demand for pre-owned inventory will continue to be higher than demand for new, as consumers are still wary of an uncertain economy. For this reason, dealers will utilize strategic CPO programs to differentiate themselves and increase their back-end profit,” Wilder went on to say.
5. More proactive reinsurance positions ahead.
Rick Christensen, vice president of product development noted that Hurricanes Harvey, Irma and Maria, along with the California fires, have taken a toll on dealer reinsurance positions. Right now, Christensen indicated dealers are still working to understand how much these catastrophic events undermined their positions.
“In 2018, they will need to apply the lessons learned from 2017 to rebuild and better insulate their positions for the future,” he said. “One of the biggest takeaways from 2017 is that when a dealer decides to take part in a reinsurance position, they are acting as an insurance provider.
“Yes, reinsurance is a wealth management tool, but the key word in reinsurance is ‘insurance.’ With reinsurance, dealers are insuring that they will cover the risk of an adverse event,” Christensen continued. “In the case of GAP, they are insuring against a total loss. Unlike service contracts, GAP losses are impacted by both single event losses, such as vehicle theft, and catastrophic losses, wherein one event i.e., ‘Harvey’ results in a significant number of total losses. With reinsurance companies, there will always be claims and dealers need to be prepared to take losses, including catastrophic losses, based on the makeup of their portfolio.
“As far as the immediate need of recouping losses from 2017 GAP claims, dealers need to take a long-term approach. If dealers try to recover the entire amount in 2018, the necessary price increase for product sales may price them out of the market,” he added.
Christensen closed with a recommendation so dealers can handle this challenge.
“A better approach will be to plan to recover the amount lost over a span of three to five years, so as to stay competitive with product pricing,” he said. “In addition, dealers need to re-evaluate how they buffer against future catastrophic events. The best way to do this is to understand your market and the likelihood of a catastrophic event, then price F&I products accordingly.
“For example, dealers operating in areas where hurricanes occur frequently should have higher F&I prices than those who operate in areas where there is little chance for a natural disaster,” Christensen went on to say.
The company that deemed itself an alternative credit bureau now is a part of what traditionally has been one of the Big 3 credit history providers.
Late on Tuesday, TransUnion announced the acquisition of Used Car Week sponsor FactorTrust, a provider of alternative credit data, analytics and risk scoring information that can empower auto finance companies and other lenders to make more informed decisions while possibly increasing financial inclusion to a wider population of consumers.
The acquisition closed on Tuesday, and financial terms were not disclosed, according to a news release shared by TransUnion.
TransUnion highlighted the acquisition reinforces the company’s position as a provider of consumer reporting models that capture a wide range of positive payment behaviors.
Officials mentioned the addition of FactorTrust’s short-term and small dollar lending data to TransUnion’s suite of credit solutions gives lenders the information they need to offer responsible borrowers a broader range of credit products, supported by TransUnion’s robust data security, technology and customer service infrastructure.
The companies explained short-term and other small dollar loans are the largest category of consumer credit obligations not currently part of nationwide credit reporting agency databases. In many cases, historically underbanked consumers have selected short-term loans because an insufficient credit history left them with few options.
Officials went on to point out the breadth of data offered through TransUnion’s purchase of FactorTrust will provide finance companies and other lenders with a more comprehensive view of consumers’ financial obligations and payment performance, expanding consumer choice.
“Access to credit is the building block of a strong American middle-class economy,” said Jim Peck, TransUnion’s president and chief executive officer. “With the acquisition of FactorTrust, we will be able to capture a wider variety of positive data that can be a stepping stone to building consumers’ credit profiles, helping people access credit and, ultimately, improve their standard of living.”
TransUnion leadership also highlighted that adding small dollar loan data to its credit reporting framework also positions the company to help customers streamline compliance with the Consumer Financial Protection Bureau’s new small dollar lending rule. The rule is designed to protect consumers from securing short-term and balloon-payment loans without the ability to repay according to the terms of the agreement.
With visibility into consumers’ traditional and alternative credit obligations, TransUnion contends that it will be able to provide all of the data lenders need to comply.
Meanwhile, the acquisition continues what has been a robust couple of years for FactorTrust.
Back in November 2015, FactorTrust closed on a $42 million investment led by ABS Capital Partners, a late-stage growth company investor, and MissionOG, an early to growth stage investor. Since that financial resource injection, FactorTrust added a former top official at the CFPB to its board of directors and made multiple appearances on the Inc. 5000 list that recognizes growth.
And now, FactorTrust is a part of TransUnion.
“Joining TransUnion is a great match for FactorTrust,” FactorTrust CEO Greg Rable said. “We share a commitment to serving consumers and customers with the highest ethical and compliance standards.
“Our products complement TransUnion’s slate of online and batch solutions, and our combined data will expand options for consumers and lenders,” Rable went on to say.
Now with FactorTrust as a part of its portfolio, TransUnion reiterated how the acquisition reinforces the company’s long history of market innovations that promote financial inclusion.
A pioneer in trended data, TransUnion believes its CreditVision Link Scores are the only scores in the market that combine directional trended data and alternative credit data, such as payment history and small dollar lending. CreditVision Link Scores allow lenders to score more than 60 million more people versus traditional models, and are proven to accurately score more than 90 percent of applicants typically returned as no-hit or thin-file.
FactorTrust’s short-term and small dollar loan data extends this inclusiveness.
“FactorTrust is a strong addition to TransUnion’s business,” said Steve Chaouki, executive vice president of TransUnion’s financial services business unit. “FactorTrust’s approach to complete tradeline reporting aligns with TransUnion’s business model, and the inclusion of more alternative data in financial institutions’ credit and underwriting decisions will enable our customers to better segment risk, allowing them to serve a broader set of customers across the credit spectrum.”
Traffic Control, a solution for dealers retailing 50 to 150 vehicles a month, this week announced new features for improving multiple F&I-related steps to enhance deal cash flow, employee efficiency and customer satisfaction.
Traffic Control CRM now features e-document technology integrated with RouteOne to pull finance company stipulations so F&I can prepare and submit to lenders all required deal paperwork first time for faster contract decisioning and deal funding.
For most dealers, about half of all deals will require finance company stipulations. Traffic Control CRM now can ensure that F&I managers know what finance company stips for a deal will require, from proof of residency and employment to a marital separation decree and more, so clean deals are presented first time.
“The days of chasing contracts to get deals funded — of risking customer retention because of conflicts over ‘We Owe’ promises, and seeing customer zeal wane as F&I managers go in and out to photocopy and scan deal jacket items, is over,” said Brendan Hurley, co-founder of Traffic Control CRM, and owner/operator of Hurley Chrysler, Jeep, Dodge and RAM.
“F&I means more than finance and insurance, it also stands for finish it, because the dealer doesn’t get his or her money if the deal’s not done,” Hurley continued. “As one dealer told me recently, ‘I’m lost in a sea of paperwork, and none of it is money.’ Enhanced Traffic Control CRM reduces the paperwork clutter and delay and turns it into more money.”
Ending that “sea of paperwork” also includes capturing We Owe’s electronically, with customer signature attached, so these promises are instantly accessible by and available to service advisors or any authorized individual to review.
“If our dealership is like others, you’re writing We Owe’s on most every deal, documenting something we owe the customer or they owe us toward the deal. Any time there are questions or lack of clarity about those promises we risk tanking customer satisfaction. Traffic Control CRM now eliminates that confusion and delay,” Hurley said.
Traffic Control’s new e-Doc feature can create digital deal jackets populated with:
• Contract
• We Owe
• Lien release
• Buyers order
• Aftermarket product purchases
• Vehicle title
• Drivers’ license and vehicle registrations
• Insurance card
• Actual cash value statement
• Down payment
• Hold check
Traffic Control CRM also provides customers with digital copies of their completed deal jacket on thumb drive, via email, and via text link to a secure microsite.
These features are for a short time a complimentary upgrade to Traffic Control CRM users. For more information, contact Mike Donaldson at mdonaldson@trafficcopcrm.com or (888) 992-4588.
Beyond its originations and collections activities, Wall Street observers questioned Credit Acceptance Corp. leadership about two specific operational areas when executives discussed their third-quarter results.
Investment analysts wanted to know about Credit Acceptance’s strategy for adding to its sales force to enhance its active dealer network, which stood at 7,737 dealerships at the close of Q3 on Sept. 30. That figure climbed by 946 new active dealers; stores that originate at least one contract with the subprime auto finance company during a quarter.
Another conference call participant also wondered how Credit Acceptance is bracing for upcoming changes in accounting regarding the allowance for losses. Last summer, the Financial Accounting Standards Board (FASB) issued an accounting standards update the organization explained was designed to improve financial reporting by requiring timelier recording of credit losses on loans held by financial institutions and other organizations.
What triggered a longer discussion was the salesforce dialogue between call participants and Credit Acceptance chief executive officer Brett Roberts, who shared that the company’s team to generate dealer activity is 30 percent larger now than it was a year ago. While the number of active dealers is higher, analysts questioned the productivity of the sales team since origination volume per active dealer softened by 9.7 percent year-over-year in the third quarter, resulting in Credit Acceptance’s total origination volume dipping by 4.7 percent to 78,589 contracts.
“As we talked about last time, it’s a longer-term play for us to increase the sales force,” Roberts said. “We don’t necessarily expect it to have any impact this year.
“If you go back and look at our history, the last time we increased the size of our sales force, it took us about two years to roughly double the sales force and then approximately three years after that before productivity got back to where it was when we started the expansion,” he continued. “So you’re looking at kind of a five-year process from start to finish. We’re not trying to double it this time, but we are increasing its size significantly, and we expect that’s something that will play out longer term.”
The analyst continued by asking when Credit Acceptance was making a play to carve out more origination volume through franchised dealerships along with its independent store footprint in hopes of driving the active dealer network to the 10,000 mark and beyond.
“We’re reluctant to sort of give you a stated goal long term that this is how big we’re going to get. I mean we’re obviously trying to get as big as we’re capable of getting, and we think adding to the sales force helps us do that,” Roberts said while acknowledging that the largest portion of Credit Acceptance’s originations came from franchised stores, “what we call national accounts, which are the kind of the largest dealer groups in the country."
He continued by adding, “We allow independents to write purchased loans if they’ve closed a pool of 100 loans on our portfolio program. So once we have some experience with an independent, if that’s positive, we’ll allow them to access the other program. And then there’s a limited number of independents that are allowed to write purchased loans from the beginning. Those are independents that we view as kind of quasi-franchise dealers, working to distinguish them from the traditional independents, and we’ve allowed them to write purchased loans as well. But most of it is franchise dealers and the larger national accounts.”
Later in the call, the topic turned to accounting as analysts inquired about how much the modified mandates for reserving for losses was going to impact Credit Acceptance’s financial standing and what preparations the company is already making for the changes to that go into effect in 2020.
“As we’ve talked about on prior calls, we’ve begun our assessment on that,” Credit Acceptance senior vice president and treasurer Doug Busk said. “The guidance is extensive and it’s complicated, and it’s not effective until 2020. Having said that, we’re making good progress. We’re working with our auditors on it. So when we know more, we’ll talk about it. But at this point, we haven’t finished quantifying the impact it will have on our financial statements."
Top-line results
Credit Acceptance reported Q3 consolidated net income of $100.7 million, or $5.19 per diluted share, compared to consolidated net income of $85.9 million, or $4.21 per diluted share, for the same period in 2016.
For the nine-month span that ended Sept. 30, the company’s consolidated net income came in at $293.1 million, or $14.99 per diluted share, compared to consolidated net income of $245.2 million, or $12.01 per diluted share, for the same timeframe a year ago.
As mentioned previously, Credit Acceptance noted its unit and dollar origination volumes declined 4.7 percent and 0.5 percent, respectively, during the third quarter. The number of active dealers grew 5.7 percent while average volume per active dealer declined 9.7 percent.
“Dollar volume declined slower than unit volume during the third quarter of 2017 due to an increase in the average advance paid per unit,” the company said. “This increase was the result of an increase in the average size of the consumer loans assigned primarily due to an increase in the average vehicle selling price and an increase in purchased loans as a percentage of total unit volume, partially offset by a decrease in the average advance rate due to a decrease in the average initial forecast of the consumer loans assigned.
“For three out of the four most recent quarters, unit volumes declined as compared to the same periods of the prior year,” Credit Acceptance continued. “This trend reflects the difficulty of growing the number of active dealers fast enough to offset the impact of the competitive environment on attrition and per dealer volumes.
“In addition, in response to the decline in forecasted collection rates experienced in 2016, we adjusted our initial collection forecasts downward during 2016. While the adjustments have been modest, we believe these adjustments have had an adverse impact on unit volumes,” the company went on to say.
Credit Acceptance named to The Detroit Free Press 2017 Top Workplaces List
In other company news, Credit Acceptance has been selected as a 2017 Top Workplace by The Detroit Free Press.
Credit Acceptance was named the No. 2 workplace in the large company category. This is the sixth year in a row that Credit Acceptance has won a Detroit Free Press Top Workplace honor.
“Credit Acceptance was selected from among hundreds of companies vying for a place on the list,” the company said. “Our ranking was based solely on the results of a team member survey administered by Energage, LLC (formerly WorkplaceDynamics), a leading research firm that specializes in organizational health and workplace improvement.
“Several aspects of our workplace culture were measured, including alignment, execution, and connection, just to name a few,” Credit Acceptance added.
