In honor of local students going back to school, Ally Financial recently announced that it will be donating 3,000 new library books to schools in the Detroit Public School district.
Officials highlighted elementary and middle school libraries throughout the district will receive 50 new books that focus on various financial literacy skills and concepts with selections for pre-kindergarten through eighth grade reading levels.
Ally’s city-wide book donation kicked off at Spain Elementary-Middle School in Detroit late last week where Ally volunteers hand-delivered the new books to the school. Volunteers also surprised all 650 students at Spain with additional school supplies, including pens, pencils, notebooks, scissors, extra paper and other necessities for their school year.
"Ally is honored to be donating to school libraries throughout Detroit, providing books that focus on real-world financial concepts and money skills that will help these students build a foundation of knowledge for the future," said Gina Proia, Ally chief communications officer and head of corporate citizenship.
“As a new school year begins, we hope that Detroit students know that there is a strong community here that is supporting them and looking forward to their educational achievements,” Proia added.
NextGear Capital’s growth is blossoming beyond North America.
Executives from NextGear Capital joined representatives from their NextGear Capital UK subsidiary and the Society of the Irish Motor Industry in Dublin on Monday to commemorate the company’s launch into Ireland.
Officials highlighted this expansion is the result of the Cox Automotive company's rapid success of its U.K. stock funding program and the positive economic outlook for Ireland.
"Car retailing is at the forefront of the growth in the Irish economy with car sales up 32 percent to date in 2015," said David Mercer, managing director of NextGear Capital UK.
“This segment is predicted to play a pivotal role in the country's economic growth, which is expected to be the fastest-growing in Europe for the second consecutive year,” Mercer continued.
“Our entry to support auto dealers will provide additional impetus to this upward trend in sales and employment, and we look forward to helping more dealers accelerate their growth plans,” he went on to say.
NextGear Capital indicated rapidly improving GDP performance, falling unemployment and rising consumer confidence are driving a notable rise in consumer consumption — and vehicles are high on the list of highly-sought items.
With the Focus Economics Consensus Forecast panel projecting growth of 3.9 percent, NextGear Capital expects vehicle sales to be at the forefront of an improving economy.
Since launching in the UK in May of last year, NextGear Capital UK has made a significant impact on the country's auto remarketing landscape. In just 16 months, the company has provided 620 dealers with $127.7 million in credit lines for more than 52,000 units.
"We couldn't be more excited about the growth we've experienced in the UK in such a short time, which is a testament to the hard work and dedication of David and the rest of the UK team,” NextGear Capital president Brian Geitner said.
“As we widen our global reach with this expansion into Ireland, our goal remains to provide dealers worldwide with simplified solutions to help them do business,” Geitner added.
NextGear Capital Ireland's operations will be supported by the NextGear Capital UK team in Chester with one account executive and regional sales manager assigned to the Irish market.
Western Funding announced the first two dealers to receive their second payment as part of its Triple Pay program.
Officials explained Triple Pay is Western Funding’s unique program that can give dealers the opportunity to build a portfolio of accounts and share in the profits of each deal. The program gives the dealers three opportunities to receive payment on the same contract.
The company added dealerships can maximize their profits by earning up to 50 percent of the interest collected and the entire principal as the customer makes payments.
Vegas Valley Motors located in Las Vegas is the first dealership to receive its second payment in the amount of $25,000.
“Vegas Valley Motors’ dedication to grow and expand relies on the additional profits from our Western Funding portfolio,” Vegas Valley Motors owner Grayson Cox said. “By placing customers who are more likely to perform in our portfolio, we have been able to earn additional profits on every deal we fund.”
The second dealership, Hollywood Preowned located in Houston, received a $15,000 second payment.
“Trusting Western Funding’s strong servicing is the key to our partnership,” Hollywood Preowned owner, Trey Bealls said. “As a partner, we are responsible for sending Western Funding good performing paper, and Western Funding is responsible for servicing each loan. So far, our partnership is paying off for both of us.”
The success of the Triple Pay program has helped Western Funding recently cross the $100-million milestone for the first time in its existence.
Dealerships interested in building a Triple Pay portfolio with Western Funding are encouraged to call the company directly at (702) 322-9951.
Prestige Financial rolled out a new direct-to-consumer loan solution on Tuesday aimed at leveraging the potential market for refinancing a vehicle installment contract.
The company highlighted that Prestige’s new offering allows consumers to deal directly with the financing source to access the best contract available to them. Until now, Prestige has provided auto financing exclusively through dealerships. The company will continue its strong relationship with dealers across the country, but has created this new option to expand its ability to serve customers in the way that works best for them.
“We can see that consumer trends are changing, and we want to evolve with them by providing the best loan options possible,” Prestige chief operating officer Rich Hyde said. “Our job is to give our customers the help they need to better their personal financial situation and this is another tool we can use to do that.”
Prestige offers auto financing across a wide credit spectrum, including the most difficult situations such as bankruptcy, medical emergencies and divorce. Management insisted the company’s commitment to helping its customers improve their situations is exemplified in its unique Rate Reduction Rewards, which drops the interest rate as payments are made on time.
Executives went on to mention direct-to-consumer financing will allow customers to make Prestige their provider when they are looking to refinance, with the goal of either lowering their interest rate, shortening their term, lowering their payment, or a combination of all three.
Individuals purchasing from a dealership or another private party can also finance through Prestige.
“The founder of our company, Larry H. Miller, always lived by the maxim, ‘Go about doing good until there’s too much good in the world,’” Prestige president Bryant Henrie said.
“Our goal is to follow that advice as best we can by treating our customers with respect and giving them the most helpful financing experience for their credit type,” Henrie went on to say.
To hear Pelican Auto Finance chief executive officer Troy Cavallaro explain the impact, the $100 million warehouse funding facility with Wells Fargo Securities the company announced on Wednesday will help the deep subprime auto finance provider in two places.
The facility represents Pelican’s chance to advance both on Wall Street as well as dealerships that often gather along major thoroughfares in the markets within the 30 states the company is licensed.
In a conversation with SubPrime Auto Finance News, Cavallaro indicated how Pelican has been working on this deal with Wells Fargo “for a few months” as a way to enhance a previous senior debt facility.
“With the growth that’s underway, we were looking at the next step,” he said. “I think Wells Fargo certainly is that. We’re looking at it from a rising interest rate environment. The potential access to the securitization market becomes more attractive.
“The Fed is obviously on course to raise rates at some point, whether it be in September or later this year. I think locking in and having the potential to securitize is very important,” Cavallaro continued.
“With that, Wells Fargo and their group of professionals have enormous experience with bringing deals to market and providing these warehouse facilities as a major force in the industry,” he went on to say. “That’s really why we chose them because they have the great reputation and what they can do for us in the long term with securitization and advisement can go a long way.”
Furthermore, with the funding injection, Cavallaro highlighted Pelican now can offer another way to reduce the number of times this scenario unfolds, especially at franchised dealerships. Imagine a customer who is eager to buy a vehicle or really needs upgraded transportation but their credit score is in the 500s so the store can’t get the deal bought by its collection of financing sources.
Now Pelican has the capacity to fund originations at 60 months and 66 months depending on the quality of the vehicle collateral.
“For franchised dealers, we’re going to allow them the opportunity to finance customers who are probably walking off their dealership lots today,” Cavallaro said.
About 90 percent of Pelican’s volume resides in indirect auto financing at both franchised and independent stores. But the development with Wells Fargo also is giving Pelican a lever to pull within a smaller part of its business, too, working with buy-here, pay-here dealers.
“We continue to work selectively with the buy-here, pay-here dealers,” Cavallaro said. “We’re looking for something different than being a traditional bulk purchase buyer. What we really seek out in the industry is buy-here, pay-here partners that want to build a relationship and sell seasoned paper from their portfolios on a monthly basis to replenish their credit lines. Our current book of business from buy-here, pay-here partner dealers is unique in terms that the performance allows us flexibility to structure and be creative with them.
“It’s not a traditional bulk purchase platform. It’s more of a partner platform, and hence, that’s why we call it that,” he went on to say.
The upward trajectory for all segments of Pelican’s business as well as the relationship with Wells Fargo also delighted the leadership of Flexpoint Ford, a private equity investment firm with offices in Chicago and New York that pushed its resources behind Pelican two years ago.
“Pelican is building a best-in-class subprime auto finance platform through a focus on high customer service standards. We remain extremely excited about our partnership with Troy and his team,” Flexpoint Ford managing director Chuck Glew said.
“The new Wells Fargo credit facility will allow the company to offer a more complete lending solution to dealers and will support further geographic expansion,” Glew continued.
Now with this warehouse funding milestone achieved, Cavallaro is eager to watch what happens as Pelican strives to be “a major, long-term player in the deep subprime auto finance space.”
He added, “We really have the runway in terms of financial backing that we need for the disciplined growth that’s in front of us.”
Along with an inkling about what its auto lending prospects might be, initial findings from the 2015 Growth Strategy Survey orchestrated by Bank Director showed the traditional banking industry may find itself unable to attract what orchestrators called a “decidedly untraditional digital generation.”
The survey showed 60 percent of the executives and board members who participated say their bank might not have the right products, services and delivery methods to serve millennials, many of whom are already in their early 30s.
In addition to the generation gap between bank boards and executives, many of them baby boomers, and younger adult consumers, a technology gap exists.
The survey noted 70 percent of bank directors don’t use their bank’s mobile channel. Even fewer use newer services, such as Apple Pay.
The U.S. Census Bureau announced earlier this year that millennials surpassed baby boomers as the largest segment of the population.
The 2015 Growth Strategy Survey, sponsored by technology firm CDW, revealed how bankers perceive the opportunities and challenges in today’s marketplace, and technology’s role in strategic growth. The survey was completed by 168 chief executive officers, independent directors and senior executives of U.S. banks with more than $250 million in assets in May, June and July of this year.
Two other key findings included:
— Apple is the nonbank competitor respondents worry about most, at 40 percent. Just 18 percent of respondents indicate their bank offers Apple Pay.
— Bank mobile apps may not keep pace with nonbank competitors. Features such as peer-to-peer payments, indicated by 28 percent of respondents, or merchant discounts and deals, 9 percent, are less commonly offered within a traditional bank’s mobile channel. The survey showed 49 percent of respondents indicate their bank offers personal financial management tools.
More survey details about auto segment
According to the survey, only 8 percent of banks that participated believed indirect auto lending was one of its three greatest organic growth opportunities. Just 3 percent of direct auto lending fell into that category.
However, the larger the institution, the higher auto financing climbed on the growth prospect list.
For banks with more than $10 billion in assets, 31 percent of them thought indirect auto lending was one of the top three growth outlets. For institutions with assets between $5 billion and $10 billion, that level came in at 29 percent.
By far where banks surveyed thought their most significant profitability potential might reside in real estate.
A total of 85 percent of respondents see opportunities to grow through commercial real estate loans. Executives and board members also expect to grow through commercial & industrial (C&I) lending, for 56 percent, and residential mortgages, at 45 percent.
The entire survey can be viewed here.
Experian Automotive noticed captive finance companies increased their appetite for risk a bit during the second quarter.
According to the latest State of the Automotive Finance Market report, the year-over-year change for captives in the highest risk segment — buyers with credit scores below 600 based on the VantageScore 3.0 scale — showed a jump of 10.1 percent. The only other provider category to register an uptick at all was commercial banks, but it was just a minimal upward drift of 0.2 percent.
Going in the other direction, Experian indicated the year-over-year change in high risk originations declined most for credit unions, softening by 5.6 percent in Q2.
Looking deeper into the numbers, analysts pointed out that captives’ portfolios aren’t overflowing with non-prime paper despite the uptick in Q2. Experian indicated just 21.1 percent of their current used-vehicle financing contracts fell into the highest risk category while only 12.2 percent of their new-model deals did.
As executives might expect, the highest risk used-vehicle financing in Q2 settled mostly within the buy-here, pay-here industry (70.7 percent) and finance companies such as Credit Acceptance and Westlake Financial Services (70.6 percent).
All told, Experian determined the three highest risk segments all posted year-over-year increases in outstanding balances as of the second quarter. The metrics of open loans are as follows:
— Non-prime: 18.20 percent, up 6.35 percent
— Subprime: 16.35 percent, up 6.98 percent
— Deep subprime: 3.57 percent, up 7.42 percent
American Auto Guardian — a provider in developing, marketing and administering vehicle service contracts and other automotive aftermarket products — rolled out its newly developed mobile application to its agents during the company’s product launch earlier this month.
Company officials highlighted that “storing paper contracts in the glovebox is now a thing of the past” because AAGI Mobile is a customer‐facing mobile application that can interact with all of AAGI’s products.
In the first release available now, users can photograph and register their contracts within the app. AAGI’s system can update the user’s contract details and vehicle information for their electronic convenience.
These features, paired with the selling dealer’s contact and location details (including interactive maps) and the ability to immediately connect to the program’s roadside assistance service, can allow users to have secure electronic information at their fingertips when they need it most.
AAGI’s creation of the app furthers their technology push for both agents and dealers to utilize AAGI’s online rating/contracting/remittingQR360, as well as partner menu and DMS systems.
AAGI president Tim Brugh insisted that used together, the app can provide a more comprehensive experience for the consumer.
“Our creative team has developed AAGI Mobile to be intuitive and valuable from the consumer’s perspective, while giving our dealer partners a more visible customer presence,” Brugh said.
“Within the app, one of the first things a customer will see is the dealer's phone number and address,” he continued. “Our goal is to drive the customer back to the selling dealer for repairs, service, questions and future sales. This is the just the first generation of what is a one of a kind tool for our dealers.
“I’m proud to offer this product to our agents, dealers, and end users, the car buying public,” Brugh went on to say.
For more details, visit www.aagi.com.
With the proliferation of tablets and other technology that make consumers' lives easier, digitizing the F&I process can have lasting, positive impacts on customer satisfaction for dealerships, according to a new study from MakeMyDeal and F&I Express.
Titled, "The Digital F&I Experience Study," the study showed that consumers who had one or more digital elements in the F&I experience were more likely to purchase F&I products, be more satisfied with the experience and more likely to recommend the dealership.
Study orchestrators pointed out that much of the vehicle-shopping process has been digitized, either through online tools or desktop tools at the dealership. However, they acknowledged a significant portion of the process for automotive aftermarket insurance products still involves cumbersome printed documents and manually signed five-ply forms.
“As an industry, we know that the F&I experience is more difficult than it should be, but what we haven't had until now are the numbers to show how that experience could be affecting the long-term profit potential for the dealership," said Mike Burgiss, founder and vice president of MakeMyDeal.
“By digitizing the experience, dealers will not only have happier customers, but they'll also reap the benefits of more word-of-mouth recommendations and repeat business,” Burgiss continued.
The study grouped participants into two categories: those who had at least one electronic element in their F&I experience and those who had a traditional F&I experience.
Overall, the study indicated only a third — 37 percent — of people are completely satisfied with the amount of time they spend in the F&I office.
However, people who had an electronic experience reported higher satisfaction with their time spent in the F&I office than those who did not: 49 percent of people who had at least one digitized element in the process were completely satisfied, versus 34 percent of people who had no electronic elements.
Further, orchestrators mentioned stores that had an electronic element in the F&I experience reported greater purchase satisfaction and a stronger likelihood to recommend the dealer:
— Seventy-four percent of those with an electronic F&I experience were completely satisfied with their purchase experience versus 56 percent of those with a traditional F&I experience.
— Sixty percent of those with an electronic F&I experience said they were very likely to recommend the dealer versus 39 percent of those with a traditional F&I experience.
Brian Reed, chief executive officer of F&I Express, is helping lead the charge to digitize the F&I sales process.
“F&I is one of the few remaining areas of the dealership that hasn't been digitized, and this study clearly shows that there is a real need — and opportunity — for more of the process to be brought online,” Reed said
“Consumers have an expectation to have digital options for just about anything they are shopping for,” he continued. “Auto dealers have a chance to strengthen relationships with existing customers, and ultimately improve their profitability by shifting to a digital F&I strategy.”
GrooveCar Direct is expanding again through a pair of new partnerships to bolster its vehicle-buying resource for the nation’s credit union industry.
Coming aboard the platform are Service 1st Credit Union of Tampa, Fla., as well as Long Island Realtors Federal Credit Union in West Babylon, N.Y.
Service 1st is a state chartered, federally insured, financial institution with assets of more than $18 million serving 2,121 members since 1939.
Located in Tampa, Service 1st was founded as Tamaimi Bus Lines Credit Union. In 1989 the credit union added other transportation and industrial companies, additional changes led to the renaming of the credit union in 2006 to Service 1st.
“GrooveCar empowered our members with the tools and information necessary to make informed auto buying decisions. We use the auto buying data to connect with our members while assisting them with loan options before they visit the dealership,” said Richard Pacelko, senior consumer financial advocate at Service 1st Credit Union.
Long Island Realtors Credit Union was established in 1972 and has four satellite offices on Long Island serving more than 1,700 members with assets in excess of $12.3 million.
“GrooveCar helped us implement a program to connect with our auto buying members in new and unique ways. We are able to foster that relationship throughout the entire auto buying process, providing vehicle information and loan options before they visit the dealership,” said Luisa Harman, chief operating officer of Long Island Realtors Federal Credit Union, adding “The customer service at GrooveCar was crucial to helping make this program an early success and we look forward to what else we will accomplish together as we push forward.
“Our goal is to empower our members with the tools and information necessary to make an informed automobile purchase,” Harman went on to say. “GrooveCar helped us solidify our presence with our members throughout the auto buying purchase, leading to an increase in loan closures.”
With the industry projected to sell more than 17 million new vehicles this year largely due to a recuperating economy and stable job market. GrooveCar insisted programs are positioned to help credit unions take advantage of this flourishing market.
Furthermore, GrooveCar Direct emphasized that staying connected with members throughout the vehicle-buying process is critical to any auto financing program.
According to a recent study by J.D. Power, the average new-vehicle buyer who uses the Internet during their shopping process will spend, on average, nearly 14 hours on the Internet shopping for a vehicle prior to purchase.
Consumers are actively and passionately seeking out these valuable buying tools, resources and dealer inventory before they visit the dealership and finalize their purchase. Providing this data along with a new marketing approach through the GrooveCar program, credit unions are able to connect with their auto buying members in real-time before they reach the dealership.
“Our program provides credit unions with the tools to grow from within, which is a goal every credit union aims for. After all, deepening the relationship with existing members is extremely profitable while building a more stable and solid membership base,” GrooveCar vice president of strategic alliances Robert O’Hara said.
“With auto lending up more than 30 percent at credit unions since 2012, the auto industry is experiencing a banner year, and this is expected to continue into 2016 and beyond,” O’Hara continued. “As credit unions generate more loan volume in this category, the GrooveCar program provides all the tools necessary to help credit unions take advantage of capturing more auto loans from members.
“The auto buying resource provides members with all the resources and interactive functions expected when shopping for a vehicle online,” he wenton to say.
“The goal is to provide solutions to fit the financial needs of members during the vehicle purchase process. GrooveCar takes the stress out of the equation and gets members on the road with a vehicle they are passionate about,” O’Hara added.
