Dealer Marketing Services, makers of ProMax Unlimited, recently released the first tool in a line of three new consumer credit soft pull products. The first solution is Instant Score, which is fueled through a partnership with Equifax.
ProMax highlighted that Instant Score, the first of three new Equifax-powered credit solutions to be released, can function as a simple plug-in to any page on a dealership’s website. Using Instant Score, visitors to a dealership’s website are able to see their Equifax credit score free of charge.
This simple process only requires consumers to fill out a short form and verify their identity, but does not require the consumer’s Social Security Number.
Upon completing the form and having their identity verified, the consumer sees their credit score, and the dealership receives a high quality authenticated lead.
“The release of Instant Score strengthens our status as an industry leader in automotive dealer soft pull credit products,” ProMax chief technology officer Darian Miller said. “And we are already looking forward to great future offerings powered by Equifax for our dealer customers.”
Following the release of Instant Score, ProMax plans to release two additional soft pull solutions also powered by Equifax: Instant Auto Credit App and Instant Screen. The three products can be deployed by dealers individually or in concert.
Instant Auto Credit App Powered by Equifax will serve as a logical extension to Instant Score. The Instant Auto Credit App can enables a dealership’s website visitors to go a step further and get pre-qualified for an auto loan.
Consumers who wish to be pre-qualified are required to fill out a short form and verify their identity, in exchange for which they can receive an offer that includes credit limit, interest rate and term. The dealership in turn receives a high quality pre-qualified lead.
“Leads are the lifeblood of the auto business and these powerful soft pull tools are the first step in converting anonymous website visitors into auto sales,” ProMax chief operating officer Shane Born said.
“But website visitors aren’t the only consumers that the dealership can benefit from leveraging soft pull technology with,” Born continued. “Some of the most valuable prospects are the ones already under the dealer’s roof: Showroom walk-ins and service lane customers.”
Executives went on to mention Instant Screen powered by Equifax can enable dealers to implement a powerful soft pull tool at the dealership itself.
Customers shopping for a vehicle or in for a service appointment can have a soft pull performed and given a firm offer of credit. Based on established criteria and backed by lender partners, these offers can be made directly to customers at the dealership or delivered via direct mail.
“Our dealership customers highly value sales leads that are sourced from their own websites and engaging prospects in their service lanes,” CEO from ProMax chief executive officer John Palmer said.
“The three credit-based marketing solutions powered by Equifax enable us to use soft pull credit data to validate consumer identities and qualify customers quickly, easily, and with full compliance with applicable laws,” Palmer continued. “This is why we are so excited to offer our dealerships the valuable services of each of these three products.”
To learn more about ProMax Unlimited and Dealer Marketing Services, got to www.ProMaxUnlimited.com.
Heritage Acceptance Corp., a finance company specializing in purchasing vehicle retail installment contracts through a network of more than 600 dealers throughout the Midwest, named Mike Monaghan as vice president of sales and marketing this week.
Heritage highlighted Monaghan brings significant experience in developing new business opportunities and managing teams with proven success. He led the development of new products and implemented new technology solutions to exceed revenue projections and expand market penetration.
The finance company added that Monaghan also has a history of increasing sales volume and income in previous roles within the financial services sector.
A native and resident of Dayton, Ohio, Monaghan earned a bachelor’s degree in business administration, with a major in finance, from the Ohio University.
“Mike’s expertise in sales and marketing in the auto financing sector will drive our growth strategy in the Midwest,” Heritage president Curt Holmes said.
“Mike brings industry best practices and a new vision for marketing Heritage’s services through our sales team to car dealers and our customer base,” Holmes continued. “He’s already built an enhanced sales team to better serve a growing dealer network, which is a top priority at Heritage.”
SubPrime Auto Finance News announced this year’s recipient of the SubPrime Auto Finance Executive of the Year Award, presented by Black Book Lender Solutions. The accolade is going to Dan Ulatowski, who is the chief sales officer at Credit Acceptance, one of the leading special finance companies in the industry.
Ulatowski has been with the company since 1996, holding a variety of different roles within that span. Credit Acceptance tapped him for his current post last January as the company has seen its GAAP net income per share grow at a compounded annual rate of 20.4 percent, with an average annual return on equity of 21.4 percent since becoming publicly traded 22 years ago.
Credit Acceptance currently has more than 6,000 active dealers in its origination network. The company closed the second quarter by originating 66,480 contracts, a 30.6-percent lift year-over-year.
Ulatowski will officially receive his honor during the SubPrime Forum, which is a part of Used Car Week on Nov. 16-20 at the Phoenician in Scottsdale, Ariz.
“Congratulations to Dan Ulatowski and the entire team at Credit Acceptance. The finance company has been one of the shining stars in special finance for more than 40 years, and Dan is one of the key contributors to its ongoing success,” said SubPrime Auto Finance News publisher and Used Car Week chair Bill Zadeits.
Ulatowski joins previous winners of the award, including Bill Jensen of Chase and Ian Anderson of Westlake Financial Services.
During the SubPrime Forum, which is orchestrated in collaboration with the National Automotive Finance Association, Black Book’s Jared Kalfus will hand out the award. Here’s a rundown of other industry executives and leaders who already made plans to attend.
“Dan is an industry expert and has been integral to the success of Credit Acceptance and their ability to grant credit approval for every consumer on every vehicle in a dealer’s inventory in seconds,” Kalfus said. “He epitomizes Credit Acceptance’s mission of changing lives one at a time.”
Kalfus also touch on why it’s important to recognize executives in this space who play a critical role in the auto finance industry.
“When you look at all the changes that we have experienced in this industry, it becomes very clear that having innovative leaders is critical to the success of the industry as a whole,” Kalfus said.
“Recognizing those who have gone above and beyond and are shaping the industry into both what it is now, and what it will be in years to come, provides direction and motivation for all of us in the space," he went on to say.
According to a new survey released by TransUnion, millennials are less likely than baby boomers to identify milestone life events that could affect their credit.
In fact, officials determined less than half of millennials surveyed could cite specific major life events that could negatively or positively affect credit, such as divorce (40 percent compared to 57 percent of boomers) or the death of a spouse (26 percent compared to 48 percent of boomers).
Also of note regarding vehicle financing, TransUnion reported just two of three millennials (66 percent) knew that taking out a car loan affects credit.
“It’s important for all people to understand the effect of life milestones on their credit so they can put themselves in a position to reach personal and financial goals,” TransUnion senior vice president Ken Chaplin.
“This survey reveals that many people, especially younger adults, may not be prepared for how certain events, such as marriage, buying a home or getting a car could alter their credit scores,” Chaplin continued.
According to the survey, consumers of all ages are generally unprepared for life events from a credit perspective because they don’t check their scores before or after the life event. Only 49 percent of all respondents said they checked their credit when planning for or experiencing a milestone, such as marriage, having a child or becoming unemployed.
TransUnion found respondents were only slightly more likely to check their credit when taking out a loan than they were when preparing for other life events. The survey showed 58 percent of participants indicated they did check their credit when applying for a mortgage and 56 percent said they did when pursuing a student loan.
“Many different events — from major life milestones to small incidents — can enhance or damage your creditworthiness,” Chaplin said. “It’s worth investing in a credit monitoring service that can keep you informed about how events in your life are altering your score.”
The survey found that, in general, millennials were more aware of the possible credit impact of ordinary life events than they were about the possible impact of major life milestones. For example, at least two-thirds of millennials identified that having a joint account with their spouse (65 percent), making late rent payments (76 percent) and filing for bankruptcy (83 percent) all have the capacity to affect one’s credit.
The online survey included responses from 1,136 U.S. consumers, ages 18 and older. The survey was conducted on Sept. 2 and 3.
Equifax is expanding its marketing offerings with the launch of a new suite of credit-based marketing products for the automotive industry.
Fueled by Equifax’s consumer credit data and fraud processes, the products enable Dealer Service Provider (DSP) unique marketing solutions to help their dealers generate high quality, identity-verified leads sourced from their websites, and within their showrooms and service centers.
The suite consists of three products, deployed together or separately. In each case, the auto loan application process concludes as it does today: the consumer completes a credit application either online or in the dealership, and the dealer runs a full credit report to ensure final eligibility.
The new products include:
1. PowerLead Check
Equifax explained this tool enables an application that is built by the DSP to be integrated onto any webpage on a dealership’s website. DSP services based on PowerLead Check can engage consumers by offering them their free Equifax credit score as they begin researching vehicles online.
The tool can help turn anonymous website visitors into valuable, identity-verified leads for the dealership. Consumers simply fill out an online form, verify their identity and PowerLead Check returns their Equifax credit score while directing their contact information to the dealer.
Furthermore, the consumer can better understand their credit standing, and the dealer receives another high-quality lead sourced from their own dealership website.
2. PowerLead Qualify
Similar to PowerLead Check, Equifax highlighted PowerLead Qualify can enable an application that is built by the DSP to be integrated onto any webpage on a dealership’s website. PowerLead Qualify invites consumers to get prequalified for an auto loan in real-time.
Consumers can consent to have their credit accessed to determine if they should receive a prequalified offer that includes credit limit, interest rate and loan or lease term, and the contact information and vehicle information is directed to the dealership.
Once the consumer gets their prequalification answer, they can opt to share it and other credit elements with the dealership, further enhancing the already valuable contact information. The consumer can better understand their credit position and gains a prequalified offer if they qualify, and the dealer receives another high-quality lead sourced from their own dealership website.
3. PowerLead Offer
The company indicated this tool enables a DSP to create a process for dealers to initiate individual consumer pre-screens instantly and engage consumers that qualify with firm offers of credit.
Utilized on the showroom floor or in the service center, PowerLead Offer can enable dealers to deliver firm offers of credit to consumers that qualify. When consumers are in the dealership for a test drive or dropping their car off for a service appointment, the dealer can pre-screen that consumer.
Based on predefined criteria established by the dealer and backed by their lender partners, consumers qualify for firm offers of credit. The offers are delivered to the consumer directly by dealership personnel and via direct mail.
“Equifax has been closely studying the best ways to empower car shoppers both online and in-store, and we are proud to unveil the PowerLead products that benefit both consumers and auto dealers,” said John Giamalvo, vice president of dealer services at Equifax.
“This new suite allows DSPs to create valuable services for dealers, by personalizing the online shopping experience and creating the best offer or terms that will get customers into the showroom,” Giamalvo continued.
“In the end, dealers can receive a boost in the return on investment for their online and sales/service marketing efforts, while consumers benefit from experiencing more transparency in the financing process,” he went on to say.
AFS Acceptance chief executive officer Dov Szapiro explained why his company’s decision to sell 65 percent of its equity to Mexican finance institution Credito Real “could not have occurred at a better time.”
With growth expectations stemming from originations as well as possibly buying portfolios from related finance companies buy-here, pay-here dealers might have, Szapiro shared his enthusiasm about the developments with Credito Real exclusively with SubPrime Auto Finance News late on Thursday.
“This is a major development for AFS and all its stakeholders,” Szapiro said about the deal made public on Wednesday afternoon. “It’s a great leap forward for AFS to become part of a best-in-class company with deep credit and consumer finance roots, broad experience providing credit to the underbanked and the no-credit segment and with a strong balance sheet.”
Szapiro then described the landscape AFS Acceptance navigates nowadays; one that’s supported by the data compiled from Equifax.
Analysts indicated 3.17 million vehicle installment contracts have been originated through June to consumers with an Equifax Risk Score below 620, which are generally considered subprime accounts. The amount marks a 9.8-percent increase over the same span a year earlier.
Equifax added this newly issued subprime paper has a corresponding total balance of $56.4 billion, a 12.5 percent increase year-over-year. Through June, Equifax added 22.5 percent of auto loans were issued to consumers with a subprime credit score.
With those industry-wide figures in mind, here’s more of the reasoning why AFS Acceptance decided to part with 65 percent of its equity for $18 million.
“Our industry is currently being flooded by aggressive lenders who we believe may be taking too much risk,” Szapiro said. “We see non-industry players such as hedge funds and private equity firms who might have not experienced the cycles that AFS has that are simply reaching for yield. This phenomenon is likely fueled by the vast liquidity in our financial system.
“With the backing of Credito Real’s financial might and AFS’s industry specific experience, this transaction positions AFS perfectly to take advantage of the opportunities that the current excess will create such as portfolio purchases and acquisitions,” he continued. “We have the experience, the appetite and now, the financial backing.”
Credito Real indicated that AFS Acceptance’s outstanding portfolio stood at about $74 million at the time of the transaction. Szapiro described it as a “great and rewarding journey” as to how the company forged its way to that portfolio level.
Szapiro recalled that AFS Acceptance took root back in 2001 when he and his brother joined forces with a cousin and his business partner. In the earliest days, a five-person team serviced five dealer partners in south Florida.
“While the road hasn’t always been a smooth ride, we have learned from our mistakes and by investing in our people and continuously improving our dealer-centric business model and platform,” Szapiro said. “We have been able to survive difficult periods like 2008 and emerge stronger.
“We have also partnered with the best vendors in our space to build a robust, efficient and scalable platform,” he continued. “This is a unique industry where we have found many competitors and peers to be very open to sharing ideas and lessons to make this a better industry for all.
“We have formed great friendships with fellow competitors and can even think of at least three peers that have been great mentors. I’m proud to call them friends,” Szapiro went on to say.
“Last but certainly not least, we have built a great team and strong relationships with key stakeholders like our 12-plus year relationship with our senior lenders,” he added. “Without them and the loyal support of our shareholders, we would have not been able to get to this point.”
This point also includes a dealer network of about 300 dealerships in 40 states; levels Szapiro is hopeful grow steadily now with Credito Real a part of the equation.
“This is great news for our existing dealer partners and those dealers that are not yet our partners,” Szapiro said. “This new partnership with Credito Real enables us to continue to expand our dealer-centric business and to provide them with solutions for their various financial and cash flows needs.
“We will also be looking to purchase portfolios from dealers and their related finance companies as well as independent finance companies looking for liquidity,” he continued.
Originations, liquidity and yield aside, Szapiro made one other point about why AFS Acceptance’s deal with Credito Real is important for all involved.
“It is also important to highlight the culture match between the two companies,” he said. “AFS was a finalist as best place to work for in South Florida and Credit Real has been named a Best Place to Work for in Mexico for three years in a row.”
F&I Express announced this week that it will provide its dealer clients with access to products from the Penn Warranty Corp. through F&I Express’ eContracting platform.
Through this new relationship, dealers using the F&I Express eContracting platform will have the ability to sell Penn Warranty service plans, which offer a wide range of coverage options.
Officials explained all of the forms necessary to complete the sale of a Penn Warranty service contract will be built into the F&I Express eContracting platform solution. Additionally, F&I Express noted that it will remit warranty premiums for vehicles financed through its portal directly to Penn Warranty.
“Penn Warranty’s integration with F&I Express will save time and money in the F&I department through eContracting with a single sign-on process,” F&I Express chief executive officer Brian Reed said.
“By integrating Penn Warranty products with the F&I Express eContracting platform, we offer our dealers another convenient way to serve their customers, while providing another layer of protection for lenders, which is critical in the current marketplace,” Reed continued.
Currently, F&I Express has aggregated a network of nearly 100 automotive aftermarket insurance providers in an online portal accessible by its dealers.
“All of us at Penn Warranty are enthusiastic for the opportunity to partner with F&I Express,” Penn Warranty president and CEO Jude Tuma said.
“Our goal is to exceed expectations for our more than 6,000 dealers,” Tuma went on to say. “We want to make the F&I process as simple and compliant as possible. F&I Express will enable us to deliver that expectation for every customer.”
Another high-ranking federal regulator tried to tie together what’s happening in vehicle financing nowadays to the mortgage-connected developments that created the Great Recession nearly a decade ago.
Comptroller of the Currency Thomas Curry gave a speech to the Exchequer Club on Wednesday focusing on credit risk. When Curry got to the auto financing market, he said, “This space today reminds me of what happened in mortgage-backed securities in the run up to the crisis.”
Analysts and other industry observers spent of portion of last year refuting claims about a “subprime bubble” and other comparisons linking auto financing to the mortgage market. Now Curry’s comments arrive as TransUnion reported back in August that its information shows the national auto loan delinquency rate declined to its lowest level in two years.
TransUnion’s auto delinquency rate — the ratio of borrowers 60 days or more delinquent on their vehicle installment contracts — dropped to 0.95 percent in the second quarter, down 3.1 percent from 0.98 percent a year earlier.
Despite those trends, Curry told the gathering at the Exchequer Club that “auto lending is another area of credit risk that we’ve had our eye on for several years.”
Curry’s assessment of the all industry wasn’t all pessimistic and negative.
“It’s good news for automakers and for the economy as well that sales are rolling along at record levels,” Curry said. “It’s also good for banks, which have supplied a significant amount of the financing that makes this activity possible, either directly to purchasers or indirectly through car dealerships.”
Curry shared that as of the end of Q2, auto financing represented more than 10 percent of outstanding retail credit in portfolios of institutions overseen by the Office of the Comptroller of the Currency. That level is up from 7 percent after Q2 of 2011.
“And increasingly, banks are packaging these loans into asset-backed securities rather than holding them in a portfolio,” Curry said. “These securities are being greeted by strong demand from investors, who no doubt remember that securities backed by auto loans outperformed most other classes of asset-back securities during the financial crisis.”
It’s at this point where Curry elaborated on his concerns regarding how auto financing is unfolding, touching on contract terms and the volume going into subprime.
“What is happening in this space today reminds me of what happened in mortgage-backed securities in the run up to the crisis. At that time, lenders fed investor demand for more loans by relaxing underwriting standards and extending maturities,” Curry said.
“Today, 30 percent of all new vehicle financing features maturities of more than six years, and it’s entirely possible to obtain a car loan even with very low credit scores,” he continued. “With these longer terms, borrowers remain in a negative equity position much longer, exposing lenders and investors to higher potential losses.
“Although delinquency and losses are currently low, it doesn’t require great foresight to see that this may not last,” Curry went on to say.
In light of that assessment, Curry stressed that how these vehicle installment contracts — especially in the non-prime segment — will perform “is a matter of real concern to regulators.”
He added, “It should be a real concern to the industry.”
Curry closed his remarks by reiterating that subprime auto financing is one of the eight most important issues the Office of the Comptroller of the Currency currently watches.
“The OCC will hold the banks and thrifts we supervise accountable for managing those risks, and I expect the public to hold us accountable for ensuring the safety and soundness of the federal banking system,” Curry said.
“Looking back, it’s clear that all of us made mistakes in the run up to the financial crisis — regulators and financial institutions alike. And I believe all of us recognize we have to do better,” he continued.
“The direction we have charted at the OCC involves laying out high expectations in a transparent way and holding ourselves, as well as the banks we supervise, accountable for meeting those standards,” Curry went on to say. “I can’t promise you that we’ll never again face a serious financial crisis. But the best way to avoid major disruptions down the road is to take sensible and tough-minded steps now.
“And that, I can promise you, we are doing,” he added.
GWC Warranty, a provider of used-vehicle service contracts and related finance and insurance products sold through dealers, recently hired dealer consultants in four new markets.
In adding four new dealer consultants, GWC is now represented with a dedicated presence in the following locations:
— Des Moines, Iowa
— Kansas City, Mo.
— St. Louis
— Minneapolis
The company highlighted dealers in these areas can now take advantage of the knowledge and expertise of their own local, go-to resource for GWC’s service, products, training and technology.
“Introducing talented, driven dealer consultants in several major U.S. markets allows GWC to help more dealers across the country sell more cars by giving car shoppers the confidence to become car buyers,” said GWC chief executive officer and president Rob Glander.
“By having a physical presence in these major metropolitan areas and their surrounding communities, we can share the ‘no worries, just drive’ experience that has helped protect more than 1.5 million used-car buyers from costly unexpected, out-of-pocket repair bills,” Glander continued.
Is it time to revisit the definition of micro-management? I receive calls on a weekly basis from frustrated executives lamenting over the difficulty of finding good sales people. You may have heard these frustrations, too, including:
— This new generation does not want to work hard.
— They won’t put in the hours.
— They are not motivated.
— They don’t want to start in sales and move up.
— How do you lead them?
Sound familiar?
Like many business students in the early 1980s, I was very influenced by Tom Peters, who wrote In Search of Excellence and similar treatises. I remember the counsel:
— Hire the best people.
— Train the dickens out of them.
— Get out of their way!
I couldn’t wait to become a manager and apply this formula. The concept of being a “micro-manager” was an appellation to be abjured at all costs.
Like many new managers, I eschewed the confines of the management system I had to use with the dealership I was managing. I already knew that I wanted to hire the best, train the dickens out of them and get out of their way. Then I would watch them soar.
However, like many young managers I quickly realized the weakness of this approach with most people. I had to learn why a proven system was really my best friend and to hold sales people accountable throughout the day. That was quite a paradigm shift.
No matter how hard we looked to hire “the best people” and no matter how well we “trained the dickens out of them,” very few “soared” if they were not held accountable throughout the day for the tasks that led to sales success such as the proper greeting, showing the vehicle, getting little “yeses,” trial closes and more.
I learned the value of logging in every guest and making sure they were contacted within 24 hours with a “good news call.” I was learning the value of managing “sales behavior” throughout the day.
I learned the value of a proven system and timely accountability with:
— Morning meetings
— Checking to make sure that daily appointments were made
— Open deals were on the right track to be closed
— Importance of a salesperson getting help before a customer leaves
I began to realize that most salespeople perform much better if they know what they will be held accountable for and when. And “when” should be soon. I would have looked at this as micro-managing at an earlier time in my young career. Was I becoming the dreaded “micro-manager?”
McDonalds teaches its store managers how to consistently achieve extraordinary results with ordinary people. Their store managers master their system and keep workers accountable for their productivity throughout the day — not at the end of the month.
At Automotive Personnel, we have been interviewing regional, district and area managers for 25 years. From our unique vantage point we have seen a distinct pattern of the very successful managers and how they lead their field sales force.
Yes they seek to “hire the best” and they do “train the dickens” out of them. But they sure don’t “get out of their way.” The behavior of the consistently most successful regional managers is what many would label “micro-management.”
So maybe it is time to redefine “micro-management” with today’s sales reps.
Here are some of the things we see the top regional managers consistently do:
Throughout the day, they hold their field sales reps accountable for their “sales behavior” not just their sales achievement. It is the day-to-day sales behavior that will lead to consistent sales success.
Example:
• Morning meeting where everyone on phone. It’s a few minutes, hopefully somewhat entertaining, motivating and informative. This is not a “beat up the reps” call. However, it insures all field reps are up and working.
• “We have (amount) to go to achieve our monthly goal and bonus. We need (amount) per day from each of you.” (We up or down on the goal?)
• Sales reps will have yesterday’s successes pointed out to the group “Mary closed the “Jackson Auto Group yesterday. They have 22 stores that they can bring aboard. Great job Mary!”
• During the day, each field sales rep will get one-on-one calls to review yesterday, their plan for today and monitor their day.
“Jim you planned on stopping in on 10 auto dealers and you only logged in six, tell me about that.
“Bill you only have eight calls set for today, that seems light since you will be in a metro area today. Tell me about that.”
“Jan what’s going on with the Airport Auto Group? Their contract has not been turned in yet. Tell me what your game plan is to close the deal.”
At the end of their day, each field sales rep is required to communicate three things, usually via email, including:
1. Who they called on and the results
2. Who they will call on tomorrow
3. What are you hearing such as competition and pricing and what dealers are saying like opportunities and problems. This gets “street level information” up the chain.
Here is the lesson learned: Top sales managers hold their reps accountable for “sales behavior” throughout the day that will lead to consistent success.
I know many managers who would label this as “micro-managing.” The managers who tell us they don’t talk to their sales force more than once a week are usually calling us looking for a job.
Don Jasensky founded Automotive Personnel in 1989. Automotive Personnel is a national search firm that places managers and executives in automotive finance companies and dealerships. He can be reached at (800) 206-6964, ext. 21 or via email at [email protected].
