National Auto Care Corp. is changing hands again.
The provider of F&I products, administration, consulting services, training and marketing support to independent agents, insurance companies, financial institutions, third-party administrators and credit unions, has entered into an agreement to be acquired by Lovell Minnick Partners, a private equity firm specializing in financial and related business services companies.
Financial terms of the transaction were not disclosed, according to a news release distributed on Monday. The announcement did indicate that the transaction is expected to close in the third quarter of 2018.
NAC, established in 1984 and acquired by Trivest Partners in 2012, is headquartered in Jacksonville, Fla. NAC is one of the longest operating providers of products such as vehicle service contracts, guaranteed asset protection, limited warranty, tire, wheel and a full suite of ancillary protection products nationwide.
Through its independent agents, NAC supports more than 2,300 partners that distribute its products. These partners include automobile dealers, credit unions, financial services companies, recreational dealers and other strategic partners across North America.
“NAC is the premier national market leader in developing innovative products that help protect consumers from a wide range of risks that can arise with vehicle or powersport ownership,” said Trevor Rich, a partner at LMP.
“We look forward to partnering with president and CEO Tony Wanderon, who is an accomplished veteran and innovator in the automotive protection industry, and his experienced team at NAC, as our investment positions the company to aggressively pursue acquisitions that complement its strong growth trajectory.”
NAC has invested significantly in the development and implementation of proprietary and third-party technology during the past four years, empowering its dealer and distributor partners with digital contract remittance and customized support services.
In addition, the company provides its distributor partners with a unique variety of support services and incentive programs that drive customer loyalty and strengthen their agency value.
“LMP has strong experience investing in service-oriented businesses across the finance and insurance value chain that will prove invaluable as NAC builds upon our flexible and customized solutions to support our agency distributor partners in driving sales and profitability,” Wanderon said.
“We believe LMP’s expertise in identifying and negotiating strategic transactions will add significant value to our acquisition strategy,” he added.
Troy Templeton, managing partner at Trivest Partners, described the relationship with NAC cultivated since 2012.
“Since our investment six years ago, NAC has grown to be one of the premier providers in the F&I space, and we are extremely proud of our partnership and investment in such an exciting company,” Templeton said.
“We are confident that NAC and the management team are well positioned for continued growth and success through their partnership with LMP,” he went on to say.
Houlihan Lokey served as financial adviser to NAC and Trivest, and Sandler O’Neill was adviser to LMP. Madison Capital Funding and NewStar Financial are providing debt financing for the transaction.
Here is another development in the industry’s effort to help contract holders make their monthly payments in ways they prefer.
Payment technology and services provider BillingTree recently announced that auto dealer management specialists Car-Ware will integrate the myPayrazr solution suite into its software platform. The completed integration enables Car-Ware clients to utilize BillingTree merchant services and deploy the myPayrazr gateway, portals and Interactive Voice Response (IVR) to manage auto finance transactions simply and effectively.
Officials added the integration also offers their end-customers a wide range of digital options to settle payments quickly and easily.
“Given the scope of Car-Ware solutions and the proven experience of BillingTree in auto finance, this partnership is a strong fit,” said Mike Dooney, president and chief executive officer of Car-Ware.
“BillingTree solutions perfectly align with our focus on offering the latest digital tools to help dealers better manage their business. The in-built security means our customers can remain safe in the knowledge that the technology they are deploying is fully compliant with industry standards,” Dooney continued.
Car-Ware has been providing software support in the dealer management and automobile industry for more than 15 years. The company services the financing, accounting, customer relationship management and inventory management needs of a nationwide roster of clients.
The integration of the myPayrazr solution suite means dealers can now offer a wider range of innovative payment channels and greatly increase the payment options available to end-customers. Channels include IVR, online payment portals and recurring payment plans.
The companies added that Car-Ware clients also benefit from BillingTree merchant services to maintain compliance and best practices for secure payment acceptance.
“Payment technology is a key revenue driver in the auto finance industry, and customers are looking for more convenient ways to keep up with auto loan payments.” said Jason Hiland, director of sales and business development in financial services at BillingTree.
“This strategic partnership provides automated, convenient and secure payment channels, putting both dealers and consumers in control when it comes to managing their finances,” Hiland went on to say.
This development is the latest BillingTree partnership in the auto industry, and the BillingTree auto finance team will be hosting a joint webinar with Car-Ware on June 14 beginning at 2 p.m. ET to explain the implications and benefits of the integration.
Registration for the free session can be completed here.
It’s taken five years, but federal officials are seeing an improvement if consumers faced a financial emergency roughly equal to one payment on their vehicle installment contract.
The Federal Reserve Board’s latest Report on the economic well-being of U.S. households indicated four in 10 adults, if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money. Officials pointed out this level is an improvement from half of adults in 2013 being ill-prepared for such an expense.
The report released this week goes on to mention that economic well-being has generally improved over the past five years. The project noted that 74 percent of adults reported they were doing at least OK financially in 2017 — up 10 percentage points from the first survey in 2013.
Even so, officials acknowledged notable differences remain across race, ethnicity, education groups and locations, and many individuals still struggle to repay college loans, handle small emergency expenses and manage retirement savings.
The report derived from the Fed’s fifth annual Survey of Household Economics and Decision-making (SHED) and examined the economic well-being and financial lives of Americans and their families. During November and December 2017, more than 12,000 people participated in the survey. They described their experiences on a wide range of topics, including income, employment, unexpected expenses, banking and credit, housing, education and retirement planning.
Among the new topics covered in this year’s report is the relationship between the opioid epidemic and local economic conditions, which could certainly impact whether a contract holder stays current or falls into delinquency.
The Fed discovered one in five adults personally knows someone who has been addicted to opioids, and those who do have somewhat less favorable assessments of economic conditions. Still, more than half of adults exposed to opioid addiction say that their local economy is good or excellent, suggesting a role for factors beyond economic conditions in understanding the crisis.
“This year’s survey finds that rising levels of employment are translating into improved financial conditions for many but not all Americans, with one third now reporting they are living comfortably and another 40 percent reporting they are doing ok financially,” said Federal Reserve Board Governor Lael Brainard. “Even with the improvement in financial outlook, however, 40 percent still say they cannot cover a $400 emergency expense, or would do so by borrowing or selling something.
“We learned that about one in five adults knows someone with addiction to opioids or painkillers; whites are about twice as likely to have such exposure as blacks and Hispanics; and exposure does not vary much by education level or by local economic conditions,” Brainard continued.
The Board’s SHED data looked at how individuals are managing their finances and making decisions vital to their financial lives and futures. Alongside the economic gains observed since the Great Recession, this report also noted challenges faced by people who are trying to piece together multiple jobs or who are struggling to establish emergency savings.
Among the report’s other key findings:
— Individuals of all education levels, races and ethnicities have shared in the economic expansion over the past five years, although reported well-being remains lower for racial and ethnic minorities and those with less educational attainment.
— Most workers are satisfied with the wages and benefits from their current job and are optimistic about their future job opportunities. Even so, challenges including irregular job scheduling remain. One in six workers have irregular work schedules that they did not request, and one in ten receive their work schedule less than a week in advance.
— Many adults are struggling to save for retirement, and less than two-fifths believe that they are on track with their savings. While preparedness for retirement increases with age, concerns about inadequate savings are still common for those nearing retirement.
The entire report can be downloaded here.
U.S. consumers are going online in droves to acquire everything from nail polish to holiday knickknacks. Their propensity to do the same to secure auto financing isn’t quite at the same level, according to a global consumer survey on automotive finance experience released on Thursday by FICO.
Silicon Valley analytic software firm FICO on Thursday announced the findings of its first global survey on consumer perceptions of the automotive finance process. The research looked at how consumers view the financing aspect of their auto purchase for new and used vehicles, as well as how the ecosystem of providers (banks, captive finance providers, credit unions, dealerships and startups) are currently meeting customer expectations.
A trio of initial findings showed:
• Only 5 percent of U.S. consumers applied for their loans online, while 29 percent plan to do so for their financed installment contract.
• Seventy-three percent of U.S. consumers obtain their financing at the dealership; more than any other country.
• The U.S. has the second longest wait time to complete the finance process as 62 percent of U.S. consumers have to wait 30 minutes or more.
“FICO’s research provides valuable insight into the auto finance experience for consumers. As a customer-centric organization, GM Financial puts our customers at the center of everything we do. The results of the research are a great validation that lenders, and their dealers must be relationship-focused throughout the customer journey,” said Bob Beatty, executive vice president for North America customer experience at GM Financial.
FICO highlighted that among the key findings is a sizable gap between a consumer’s interest in online auto financing (33 percent) versus current global market adoption (10 percent). In the United States, there is a 24-point difference, as only 5 percent of U.S. consumers applied for their financing online, while 29 percent plan to do so for their next purchase.
Also, in the U.S., FICO noticed that more than any other country surveyed, the dealership is still the main channel for U.S. consumers as 73 percent finance their vehicle purchase at the dealership.
FICO acknowledged consumers appreciate immediacy in their financing process. The survey showed 87 percent would accept or at least consider an instant offer for financing a vehicle if that meant they could avoid dealing with a bank or doing extra paperwork. However, globally, 54 percent of consumers wait 30 minutes or more to complete their financing transaction — from filling out the application, to receiving an offer and finalizing the loan.
The percentage of U.S. consumers who have to wait that long is higher at 62 percent, which makes it the second highest country, behind only Mexico at 65 percent.
In contrast, the U.K. has the shortest wait time for the financing process with 63 percent waiting less than 30 minutes.
“The survey results underscore that consumers expect more transparency, personalization and timeliness. There is tremendous opportunity for the industry to move beyond transactional relationships into a long-term, customer-centric relationship by providing personalized experiences that gives customers more control over the auto buying process,” said Ken Kertz, senior director and practice leader of auto and motorized at FICO.
Other data points of note for the U.S. included:
• Financing has a meaningful impact on the effectiveness of marketing to auto shoppers. FICO noticed 67 percent of participants said that the level of financing they qualified for had some or a great deal of impact on their selection of a vehicle, make, model or dealership.
• There are generational differences in auto financing. FICO found that baby boomers strongly prefer going to a dealership, and millennials prefer going to a bank. In general, younger consumers are more likely to seek digital financing, however, is not the first choice for the majority of any age group.
• Monthly payments and interest rates are most important when considering competing options. The findings indicated consumers care most about low monthly payment amount (92 percent) and interest rates (94 percent) and are willing to put more money down as a trade-off.
• Overall, consumers are fairly satisfied with their experience. FICO said 87 percent of respondents felt they got a good or excellent deal, and the clear majority of consumers around the world feel that they are receiving at least a fair deal in during their financing experience.
FICO’s independent research surveyed 2,200 adult consumers across nine countries including the U.S., Canada, Mexico, Chile, Australia, New Zealand, Germany, Spain,and the United Kingdom. The respondents were between the ages of 18 and 64 who acquired financing for a new or used vehicle within the last three years.
More information on the survey results can be found at this website.
More industry consolidation came to light on Wednesday as Realtime Electronic Payments (REPAY) made another acquisition.
The provider of advanced payment technology products and electronic transaction processing services for the consumer finance industry has acquired PayMaxx Pro, an electronic payments provider to the automotive industry.
“This acquisition expands our footprint in the automotive industry and broadens our software integration capabilities, enabling us to better serve our existing and prospective customers,” REPAY chief executive officer John Morris said.
“PayMaxx Pro’s people will bring a wealth of knowledge and expertise, and we look forward to welcoming Megan Bussie, Jon Leedom and their team to the REPAY family,” Morris added.
Executives said PayMaxx Pro customers will soon experience the benefits of the acquisition.
“We are excited about the expanded product offerings and technology enhancements this partnership brings to our integrated partners and clients,” said Bussie, former director of PayMaxx Pro and now director of sales for REPAY.
Bussie indicated customers will have access to an enhanced product suite, including a customer-facing mobile app, and they will continue to receive the exceptional PayMaxx Pro customer service.
Both companies highlighted they also will benefit from shared resources and cutting-edge technology, and REPAY will continue to invest in the consumer finance and automotive industries.
REPAY pledged to expand its relationships with software partners while remaining committed to providing a first-class customer experience where customers can automate and accept payments anywhere, anytime and through any method.
“REPAY was the obvious choice when selecting a group that had the resources, knowledge and commitment to continue the growth of PayMaxx Pro. They will build upon the products and services that will enhance our clients' business operations,” said Chris Leedom, chief executive officer and president of PayMaxx Pro.
REPAY isn’t unfamiliar with making acquisitions as almost a year ago the company finalized a deal for Sigma Payment Solutions.
ACI Worldwide, one of the more than 60 exhibitors set to share their expertise during Used Car Week, recently announced the winners of the 2017 ACI Innovation Awards, with one of the recipients being a finance company that specializes in subprime paper.
The awards recognize banks, financial intermediaries, merchants and billers around the world for their innovative use of ACI’s UP portfolio of payment solutions. And one of the winners was Nicholas Financial, which originates subprime vehicle installment contracts with franchised and independent dealerships.
ACI Worldwide highlighted that Nicholas Financial pioneered new payments channels and technologies to increase electronic payment adoption while reducing print and mail costs, increasing customer adoption and satisfaction.
This year’s other winners include:
• Auchan Retail International: One of the world’s largest retailers, Auchan leveraged new card payments standards and took control of the payment chain to more effectively innovate, improve time to market, reduce costs and ultimately improve customer satisfaction.
• Everlink: A leading provider of comprehensive, innovative and integrated payment solutions and services to Canadian Financial Institutions, Everlink successfully deployed Proactive Risk Manager, augmenting it with enhanced rules and integration into SMS messaging for a 360-degree measure of customer protection. This deployment is leading the way in Canada with the capability of protecting millions of Canadians.
• MB Financial: A top commercial bank, MB Financial implemented a best-in-class internal training and communication program in which every customer received specialized training related to a major systems conversion.
• Rabobank Nederland: A leading bank in the Netherlands, Rabobank implemented a complete new debit card payment infrastructure. By standardizing on solutions, Rabobank was able to realize a faster time to market ratio, allowing the bank to be more responsive to new developments like mobile payments with new services, the rapid emergence of wearables, the internet of things and biometrics.
• The Co-operative Group: She leading convenience retailer in U.K., Co-op established a customer rewards experience unmatched among national merchants; the program has generated significant increases in customer loyalty and community engagement.
• Westpac New Zealand Limited: A faster payments pioneer in the Asia Pacific region, Westpac NZ implemented a new payments engine capable of meeting the Reserve Bank of New Zealand’s mandated go-live date for hourly intraday settlement and interchange of electronic credits and payments.
The awards celebrate global payments innovation, and winners were selected by a panel of judges composed of ACI experts and industry analysts from Aite Group, Celent and Ovum.
“ACI is honored to work with many tremendous organizations—and the winners of this year’s Innovation Awards represent the best in forward-thinking payments excellence,” said Craig Saks, chief operating officer at ACI Worldwide. ”We are thrilled to have received a record number of submissions this year; these organizations make us proud to support innovation in the payments industry.”
For additional information on the Innovation Awards program and winners, visit aciworldwide.com/awards.
Along with sharing some insights on how new vehicles are being financed in the Houston market following Hurricane Harvey, Edmunds reported that nationwide used-vehicle financing trends in September remained stable.
Analysts determined the average term for a used-vehicle installment contract written in September came in at 66.81 months, down just slightly from a year earlier when it was 66.95 months. Five years ago, terms averaged 63.31 months in September, according to data Edmunds shared on Tuesday.
The amount financed to finalize used-vehicle deliveries ticked up by $169 year-over-year to $21,380 in September. During the same month five years ago, the average amount financed for a used-vehicle contract stood at $18,976.
Edmonds noticed the rate ticked up a bit, too, in September as the average APR was 7.52 percent, up from 7.29 percent a year earlier. However, Edmunds pointed out that finance companies wrote paper with a higher APR in September 2012 as the average was 7.96 percent.
The monthly payment buyers are making on used vehicles they took delivery in September came in at $386, up by $6 year-over-year and by $23 compared to five years ago.
The average down payment for a used-vehicle contract rose to $2,494, representing a $141 climb year-over-year and a $309 jump versus September 2012.
Moving over to the new-car side, Edmunds determined Houston-area shoppers who are buying replacement vehicles for those lost in Hurricane Harvey are being a bit more pragmatic. The average new-car down payment was $4,432 in Houston in September, up 18 percent compared to last month and up 24 percent compared to September of 2016.
Additionally, analysts noticed the average monthly payment for a new car in Houston dropped to $571 in September, a 4-percent decline from September of last year and the lowest average monthly payment since July 2015.
Edmunds also mentioned new-car sales in Houston spiked 109 percent in the three weeks immediately following the hurricane when compared to the three weeks before the storm hit.
“Car buyers in Houston tend to opt for pricier trucks and SUVs, so it’s a positive sign to see buyers putting more down up front,” said Jessica Caldwell, Edmunds executive director of industry analysis.
Meanwhile, in the rest of the country, automakers are still grappling to find the right way to trim excess inventory to make way for 2018 vehicles. Despite overall incentives reaching record levels, Edmunds explained OEMs are reticent to offer zero-percent financing deals.
Similar to what Edmunds saw in August, in September only 10 percent of new-car contract had zero-percent financing, compared to 15 percent of loans in September of last year.
“Even though automakers are being very aggressive with incentives, because interest rates are still relatively low, zero-percent financing just isn’t the big draw that it used to be,” Caldwell said.
“Right now dealers are more apt to sweeten the deal through discounted leases or taking cash off of the purchase price, especially on 2017 models that are languishing on the lot,” she added.
RateGenius, an online auto refinancing platform, recently reached a milestone by refinancing more than 334,738 installment contracts, saving customers an estimated $350.5 million since its inception in 1999.
“It’s gratifying to know that we've helped so many people save such a magnitude of money. Knowing that many people live paycheck to paycheck lets me know that we provide a valuable service, and I'm extremely proud of that,” RateGenius chief executive officer Chris Brown said.
RateGenius now looks forward to helping 400,000 people refinance their vehicles — 334,738 down, 62,262 to go.
“You do good things, good things come,” Brown said. “Our momentum is tremendous. People are realizing that we are great and are telling their friends. Word of mouth is one of the best forms of advertising.
“Every day the number of referrals that we get grows. We look forward to seeing our network grow and continuing to help as many people save money as we can,” Brown went on to say.
While many of the August auto finance metrics Edmunds compiled and shared remained stable on a year-over-year basis, analysts did spot one rise that should be pleasing to finance companies.
Edmunds noticed increases in down payments in August for both new- and used-vehicle transactions, compared to the same month last year. For new models, the average down payment climbed by 5.9 percent to land at $3,667.
The average used-vehicle down-payment jump was even more, coming in at $2,480, which represented a 7.2 percent increase year-over-year.
Looking back to five years ago, Edmunds found that down payments on both used and new financing is much higher. Analysts pegged the rise on the new-model side at 9.1 percent and 14.7 percent for used vehicles.
As seen in the chart below, Edmunds determined four of the other major auto finance metrics did not change much in August.
New-Vehicle Financing Trends
| |
August 2017 |
Change from August 2016 |
5-Year Change |
| Term |
69.3 months |
0.8% |
6.8% |
| Monthly Payment |
$507 |
0.6% |
10.1% |
| Amount Financed |
$30,473 |
0.2% |
15.5% |
| APR |
4.8% |
10.9% |
17.8% |
Used-Vehicle Financing Trends
| |
August 2017 |
Change from August 2016 |
5-Year Change |
| Term |
66.7 months |
-0.1% |
5.5% |
| Monthly Payment |
$382 |
1.4% |
5.1% |
| Amount Financed |
$21,091 |
0.9% |
11.2% |
| APR |
7.5% |
2.6% |
-6.1% |
Your thumbprint isn’t just for your iPhone any longer.
FIS and Equifax recently teamed up to improve consumer experiences by bringing new levels of convenience and security to consumers challenged with maintaining multiple usernames and passwords to protect themselves from financial fraud and identity theft.
The two companies jointly now offer OnlyID, an identity verification solution that can provide a higher level of account protection and personal control through a single, secure digital log-in, consisting of the consumer's thumbprint or another unique identifier.
This identity solution, which can be used across multiple accounts, will be offered by financial institutions and e-retailers who participate in the OnlyID Network. In addition to providing security and convenience to consumers, OnlyID can benefit financial institutions and businesses by helping them reduce fraud claim costs, provide better digital experiences and increase consumer loyalty.
“Imagine if you no longer needed passwords to protect your digital identity because you had a unique, protected identifier that only you could use at the places where you bank and shop,” said Bruce Lowthers, head of FIS Payments.
“OnlyID from FIS and Equifax brings the power of advanced authentication technologies to make consumers' financial lives simpler while providing secure protection against fraud,” Lowthers continued.
Equifax and FIS, both trusted data stewards with powerful identity authentication and analytics capabilities, can deliver anti-fraud solutions to thousands of financial institutions. This joint effort will advance digital security and uniquely positions them to deliver a powerful, universal authentication service through OnlyID.
"OnlyID combines powerful predictive analytics with risk scoring models that generate a frictionless fraud assessment, without disruption to consumers or businesses,” Equifax president Trey Loughran said. “Our collective unique data assets, innovation and depth of expertise across Equifax and FIS enabled us to create a solution that will advance digital security over the web and via mobile devices.”
The two companies plan to co-market the OnlyID solution to banks, credit unions, retailers, telecommunications providers, utilities and other businesses.
“Passwords not only provide little security, they also result in cumbersome and clunky user experiences, particularly in the mobile environment," said Julie Conroy, research director at Aite Group. “The next generation of digital security leverages authenticators such as device-based security and biometrics, which provide greater levels of security as well as a better consumer experience.”
For more information about OnlyID from FIS and Equifax, visit MyOnlyID.com.
