GWC Warranty offered four suggestions to help vehicle deliveries from disintegrating at the point when F&I products are offered to the customer.
The company insisted that dealers know a vehicle service contract is a sound purchase that will help protect that customer for many miles to come. But “when F&I products infringe upon the monthly payment they’ve already agreed upon,” GWC Warranty said in a blog post on its ongoing training endeavor Accelerate, “the sticker shock that customers feel when you try to add on these products can sometimes be enough to put a deal in jeopardy.”
To keep that metal moving, GWC Warranty recommended that dealers train their staffs to begin building value in these F&I products throughout each phase of the buying cycle. Here are four tips the company noted that can sell F&I products without ever entering the finance office:
1. Enroll in a certified pre-owned program
Programs such as CarMark Certified or GWC Warranty’s Certified Pre-Owned Program can open the door to build value in a VSC from the beginning of the customer’s journey.
“With collateral for your advertising, your lot and more, a strong certified program can differentiate your business in part due to the extended coverage you’re offering,” GWC Warranty said.
2. Advertise the coverage you offer
If you’re using a certified program, dealer can highlight this availability with a logo on each online vehicle listing.
“You can also discuss included coverage on your website or in other advertising such as print or digital,” GWC Warranty said.
3. Utilize point of sale
Items such as mirror hangtags, window clings, floor mats, glove box hangers, and anything else dealers can put on a vehicle to advertise that the store offers extended vehicle coverage can help get the conversation started.
“In many cases, if a customer is asking you about a vehicle service contract, they’ve already bought the car in their heads,” GWC Warranty.
4. Work it into your sales discussion
As you’re selling a vehicle, GWC Warranty mentioned that dealers likely are already talking about four-wheel drive, fuel economy, vehicle history reports and more.
“Tack on a quick point about the extended coverage you offer,” the company said. “Explain that while you inspect all your vehicles to ensure they’re in top working order, the reality of buying a used car is that they are more likely to experience a mechanical failure.
“It’s important to avoid out-of-pocket expenses with back-end products like a vehicle service contract,” GWC Warranty added.
Editor’s note: This post and more can be found at GWC Warranty’s blog Accelerate that’s available here.
For the first time according to the data that goes back to the first quarter of 2011 provided by the Federal Deposit Insurance Corp. (FDIC), commercial banks that participate in auto financing saw their quarterly charge-off amount surpass $1 billion.
While FDIC reported that insured institutions generated an 11.9 percent rise in net income during Q4, the agency also mentioned total auto loan charge-offs came in at $1.114 billion, up from $958 million in the third quarter and $966 million a year earlier.
The Q4 net charge-off rate registered in at a high point, too, ticking up 5 basis points higher year-over-year to land at 0.74 percent.
The total amount of outstanding paper held by commercial banks also is at the highest point in the FDIC’s data set. The 4Q level stood at $414.8 billion, up from $408.4 billion a quarter earlier and $385.2 billion at the close of 2014.
Fueling that charge-off climb is a delinquency rate also at its highest point going back to the outset of 2011. The FDIC pitted the rate for banks at 1.82 percent, 7 basis points higher year-over-year.
While the auto segment of commercial banks’ business might be sustaining some turbulence, institutions’ overall health appears good as the FDIC calculated the group posted $40.8 billion in net income during the fourth quarter.
Of the 6,182 insured institutions reporting fourth quarter financial results, more than half (56.6 percent) reported year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable in the fourth quarter fell from 9.9 percent a year earlier to 9.1 percent, the lowest level for a fourth quarter since 1996.
“Revenue and income were up from the previous year, overall asset quality continued to improve, loan balances increased, and there were fewer banks on the problem list,” FDIC chairman Martin Gruenberg said.
“However, banks are operating in a challenging environment,” Gruenberg continued. “Revenue growth continues to be held back by narrow interest margins. Many institutions are reaching for yield, given the competition for borrowers and low interest rates. And there are signs of growing credit risk, particularly among loans related to energy and agriculture.”
When looking at the overall performance of banks, James Chessen, chief economist at the American Bankers Association, cheered the moves institutions are making.
“Asset quality sustained its five-year trend of improvement as cautious behavior on the part of both banks and borrowers continues to pay off,” Chessen said. “Banks have largely worked through the cycle of assets that were troubled, and the drag from these loans continues to dissipate.
“The conservative approach to underwriting that has characterized banking over the last five years will protect the industry from another down cycle,” he continued. “As assets grow, the industry is setting aside additional provisions for loan losses that may occur down the road. This is prudent management to assure resources are available in a downturn.”
Credit Acceptance Corp. recently completed $385.0 million in asset-backed non-recourse secured financing.
Pursuant to this transaction, Credit Acceptance contributed loans having a net book value of approximately $481.4 million to a wholly-owned special purpose entity that will pledge the loans to institutional lenders under a loan and security agreement.
Executive highlighted this financing will:
• Bear interest at one-month LIBOR plus 195 basis points
• Revolve for 24 months after which it will amortize based upon the cash flows on the contributed loans
• Be used by us to repay outstanding indebtedness and for general corporate purposes
The company noted it will receive 6.0 percent of the cash flows related to the underlying consumer loans to cover servicing expenses. The remaining 94.0 percent, less amounts due to dealers for payments of dealer holdback, will be used to pay principal and interest to the institutional lenders as well as the ongoing costs of the financing.
“The financing is structured so as not to affect our contractual relationships with our dealers and to preserve the dealers’ rights to future payments of dealer holdback,” Credit Acceptance officials said.
Western Funding launched a compliment to its successful Triple Pay Program this week; an initiative dubbed the “10-10-10 Program.”
As an extension of the Triple Pay program, the subprime auto finance company explained its “10-10-10 Program” allows dealers to fill their Triple Pay buckets even faster and increase the speed at which they may receive their second and third participation check by financing quality older vehicles with higher mileage.
The “10-10-10 Program” stands for 10-year-old vehicles with a maximum of $10,000 amount financed (before add-on products) and a minimum of 100,000 miles.
“The ‘10-10-10 Program’ gives dealers the opportunity to profit faster by reaching their second participation check and drive towards achieving the third payment stream on Triple Pay,” Western Funding president Guerin Senter said. “Dealers now have a greater opportunity to reach their residual income at a much faster pace than before. We think that paying the dealers quicker is great for our long-term relationships.”
Triple Pay is a unique program offered by Western Funding that can give dealers the opportunity to build a portfolio of accounts and share in the profits of each deal. The program provides dealers three opportunities to receive payment on the same contract.
Dealerships can maximize their profits by earning up to 50 percent of the interest collected, and the entire principal as the customer makes payments. Triple Pay is a product geared toward lower mileage and newer model year vehicles.
Dealerships interested in building a Triple Pay portfolio with Western Funding are encouraged to call the finance company directly at (702) 322-9951.
This week, CUNA Mutual Group announced it is investing in a new direct-to-consumer lending platform SpringboardAuto.com. Officials indicated the relationship means this new technology solution can provide a direct online auto loan platform so credit unions can lend to members with below-prime credit ratings without creating additional credit or operational risk for the credit union.
CUNA Mutual Group noted that its minority ownership interest will help SpringboardAuto.com build scale and invest in its technology platform and third-party data sources.
“CUNA Mutual Group is helping credit unions find new ways to support their members’ financial needs, and SpringboardAuto.com represents one of those new ways,” said John Wallace, senior vice president of lending products at CUNA Mutual Group.
“Auto loans are a core credit union member service, and we believe SpringboardAuto.com provides a valuable option for members who otherwise might not be able to get vehicle financing through their credit union,” Wallace continued.
SpringboardAuto.com will begin offering auto financing services through credit union referrals in selected states later this year, expanding to additional states thereafter.
SpringboardAuto.com explained that it uses a sophisticated automated credit engine for real-time responses. The tool can offer flexible approval terms that can enable approved members to configure their loan preferences, empowering them to see the impact of their decisions throughout the process.
After receiving a referral from their credit union, members can complete the application online without conventional obstacles that borrowers with below-prime credit sometimes experience. The process is geared to minimize requests for redundant customer information, creating a more streamlined experience.
“We are excited about the strategic investment and support from CUNA Mutual Group, and we look forward to helping credit unions serve more members with auto lending alternatives,” said SpringboardAuto.com chief executive officer Jim Landy.
“We believe we have built an attractive path for credit unions to deliver a rewarding member experience with the compliance rigor our partners require,” Landy added.
Teledata Communications (TCI), a provider of cloud-based loan origination solutions, hired Mark Gleason this week as director of sales for the consumer finance industry.
In this capacity, TCI highlighted that Gleason will oversee the company’s sales activities in this expanding marketplace. Based in Costa Mesa, Calif., Gleason brings more than 10 years of experience in financial services technology and more than 30 years of technology industry expertise to TCI.
“TCI already has substantial market share with credit unions, finance companies and banks in the indirect auto lending space, and new markets are opening rapidly. One example is the consumer lending sector, which is experiencing an exciting transition to an Internet-based, anytime, anywhere lending environment,” TCI president Bill Nass said.
“We’re delighted that Mark has joined our organization, and will contribute in-depth knowledge to help TCI continue to expand its footprint in the consumer lending sector,” Nass continued.
Gleason’s experience includes loan origination systems, regulatory compliance, servicing systems, expert systems and advanced analytics. He has worked in several FinTech markets, including automotive, health care, mobile and online lending.
“Having partnered successfully with TCI for many years, I'm very happy to join the team at this opportune time,” Gleason said. “While there’s been a lot of noise about technology in the financial sector, TCI has stood above the crowd when it comes to innovation.
"Its DecisionLender 4.0 platform represents a quantum leap forward in terms of loan origination systems. This is truly visionary technology, and is one of the key reasons I elected to join TCI,” Gleason continued.
“I’m eager to help bring this powerful technology to a market that can truly benefit from more adaptable and efficient loan origination solutions,” he went on to say.
TCI’s loan origination solution, DecisionLender 4.0, is a solution that can provide flexibility and control to finance companies. Through this offering, lenders have the capability to create and adjust any number of lending rules, parameters, application fields and workflows according to whatever criteria they choose — without using expensive and time-consuming IT or development resources.
TCI pointed out that DecisionLender 4.0 also can deliver real-time visibility into a finance company’s performance through a set of robust analytics tools, allowing them to proactively assess and adjust the efficiency of their operations.
“The degree of customizability available through DecisionLender 4.0 represents a completely new approach in loan origination technology,” TCI said.
For more information on TCI and DecisionLender 4.0, visit www.tcicredit.com.
Vehicle service contract provider AUL Corp. recently promoted Scott Smith to lead the operations department in addition to his role as the service support manager.
Smith joined AUL nine years ago as a customer service representative and then was appointed a claims team leader before being promoted to the service support manager position.
In his new role, the company highlighted Smith will bring leadership and innovation to the combined synergies of the two departments as AUL continues to grow year over year. The operations department is the underwriting and processing center for AUL.
“Scott is an inspirational leader that has taken our service support team to new levels,” AUL chief operating officer Jimmy Atkinson said.
“We have a very high commitment to customer service and [we] answer every call personally through that team, handling over 30,000 calls per month,” Atkinson continued. “Scott has developed processes and training programs and even, more importantly, the spirit of teamwork that we know he will bring to our operations group.”
Smith replaced Jackie Mathews, who was one of the first employees at AUL. The company noted Matthews made the decision to step back from her manager role and become a team member again as she prepared for retirement after being an AUL employee for more than years.
“Jackie is employee No. 3,” AUL founder and chief executive officer Luis Nieves said. "When we were first starting AUL, we folded brochures and pitch kits in Jackie’s basement, and she has been a loyal and dedicated part of AUL ever since.”
Furthermore in other company news, AUL mentioned Smith promoted Kim Freemen to the position of team leader from the sales support team, joining Isabel Gutierrez in that role.
Also, Heath Rosa has been named operations analyst.
“These changes reflect the talent and bench strength at AUL and further the commitment to providing agents, dealers, and contract holders with unsurpassed service,” the company said.
F&I Express recently welcomed AssurancePlus to its growing network of aftermarket F&I providers.
Officials highlighted that the addition of AssurancePlus to F&I Express will allow dealers the ability to eRate, eContract and eRegister all of AssurancePlus’ services and products.
“By offering innovative insurance products and services that enhance the customer experience, AssurancePlus is a fantastic addition to our growing provider network,” F&I Express president and chief executive officer Brian Reed said. “We are excited to bring AssurancePlus on board for our many customers.”
For more than seven years AssurancePlus has been providing auto deductible reimbursement programs. The creation of RapidFire Auto brought technological advancement into dealerships with two-way text communication between dealers and customers.
The newest AssurancePlus product, Auto Protection Plan, allows dealers to sell a protection plan that includes auto deductible reimbursement, auto repair reimbursement, 24-hour roadside assistance, auto expert opinion and emergency travel.
“Partnering with F&I Express allows AssurancePlus to remove barriers, streamline the process for dealers to utilize our Programs and increase efficiencies for our dealer clients,” AssurancePlus president Greg Lankfer said.
About a year and a half after the company lost its founder, who died in a cycling accident, Fleet Financial has now reemerged with what company leadership hailed as a new look, feel and brand.
Fleet Financial, a national finance and insurance marketing firm that focuses on auto refinancing, announced this week that it’s rebranding as iLendingDIRECT. A new website carrying its new visual identity was also launched at www.ilendingdirect.com.
President and chief executive officer Nancy Fitzgerald explained that iLendingDIRECT provides low‐interest auto loans and end‐of‐lease financing programs directly to consumers, specializing in tailored solutions to customers’ unique financial situations.
“The name iLendingDIRECT is a more personal approach to our customers, communicating how much we care,” Fitzgerald said.
“Our new logo symbolizes a smiley face, and reminds us that although financial decisions are serious they can still be fun,” she continued. “Our tagline ‘Smart Financial Solutions’ is indicative of how we serve our customers, not just with their auto loans; we look into our customers’ whole financial world and provide solutions.
“As a team, we came together to find out who we were and where we were going. What emerged was a strong unified voice on what our core values are,” Fitzgerald added.
The company leader also mentioned an aggressive growth plan for iLendingDIRECT stays true to its core value: Freedom.
“When we achieve our goal of growing our business as a team, we gain the freedom to grow personally and professionally, and the cherry on top of it all is financial freedom,” Fitzgerald said.
The company insisted iLendingDIRECT can extends this financial freedom to its customers through what the finance company calls its five‐point advantage:
• Great savings for customers through low interest rates
• One‐stop shop for every financial situation, covering auto‐loan refinancing, company vehicle purchase, auto lease buyout, secured auto title loan, GAP insurance and auto warranty
• Peace of mind receive expert loan advice from highly qualified consultants
• Tailored solutions that address specific needs and means
• Holistic approach to customers’ financial well‐being
Fleet Financial began in 2006 with a business model to finance the purchase of company vehicle. With the financial crash just a year later and the historic low interest rates that followed, the company saw the opportunity to go into auto loan refinancing.
“Fleet Financial is the brainchild of my husband Patrick. We grew the company at an unprecedented rate,” Nancy Fitzgerald recounted.
Then Patrick Fitzgerald did tragically in 2014.
“What emerged out of the rubble was a company, a team, and most importantly a family determined to stay the course, remain strong, and forge into the future,” Nancy Fitzgerald said.
In 2015, Fleet Financial broke every record in the company’s history by growing 35 percent in a single year.
"I am confident that this will be an exciting new era for Nancy and her company. After the tragic death of her husband Patrick, Nancy used her leadership skills and her passion to build an exceptional management team,” Lease Plan USA president Mike Pither said.
The company highlighted more developments are ahead as iFleetDIRECT and iPartnersDIRECT are but two of the innovations iLendingDIRECT has in store for 2016.
“Fleet Financial has been a valuable partner of Westlake for many years and we are excited about this major milestone. We look forward to building upon our partnership with iLendingDIRECT,” said Ian Anderson, group president of Westlake Financial.
Nancy Fitzgerald wrapped up the lastest achievements by saying, “Fleet Financial will always be our parent company, just as Patrick will always be our inspiration. Those are our roots from which we will grow.
“iLendingDIRECT is our fresh start, and will be even better because iLendingDIRECT has our fleet family guiding it and holding it up — its foundation is solid and strong,” she went on to say.
After many years of investing in research and development with its valued clients and partners, MaximTrak Technologies recently rolling out an F&I platform the company believes has four unique enhancements geared toward international business.
The MaximTrak Global platform is being released in the United States, Canada, China, Australia, South America and into Europe. This new platform contains newly enhanced features aimed at creating a world-class experience that not only handles the challenges of modern F&I but increases profitability and CSI scores.
These new features include:
— Customizable portal page: F&I managers have access to a configurable landing page upon login that displays the most relevant reports, news items, alerts, and other critical content.
— Enhanced workflow: With a newly enhanced workflow, F&I managers can flow through the transaction process, rating, menu, contracting, and reporting faster than ever — without compromising on compliance.
— Media-rich content: New presentations tools and videos are underway to allow for a more engaging and informative sales experience for the modern consumer.
— Scalable, configurable and customizable: The new platform can allow for new levels of tailoring the system to meet the particular needs of the dealership and the F&I manager. It also sets the stage for adding new custom features to meet the specific ways our customers do business.
In addition, new and existing clients can upgrade to MAXIMTRAK FLITE, which can combines a state-of-the-art touch screen and tablet technology with MaximTrak’s fully integrated, compliant and comprehensive system to put the customer in control in a whole new way.
The entire buying process is enhanced and streamlined with interactive videos, surveys, product recommendations, package building, and more. With the flick of a finger, customers are guided through a consistent, frictionless, and enjoyable sales experience transforming the vehicle delivery process and driving dealer profitability.
MaximTrak Global will be made available to existing MaximTrak customers. Current and new customers can upgrade to FLITE at an introductory rate for a limited time.
“We have taken what we have pioneered in America out to lead the global effort. Then we are bringing back home what we learn internationally,” MaximTrak Technologies president Jim Maxim Jr. said.
“This cross-pollination gives us unique insights into creating better buying experiences, better systems, and better results for OEMs, dealer principals, F&I managers, agents and the end consumer,” Maxim added.
To learn more and for a personal demonstration of MaximTrak, call (800) 282-6308 or email [email protected].
