Two leading providers of technology to help dealership F&I offices function smoothly — Darwin Automotive and Reynolds and Reynolds — each recently landed significant developments to boost their industry presence.
First, Darwin Automotive announced that Darwin Online is now integrated with RouteOne for retail contract validation, submission and approval.
Meanwhile, Reynolds and Reynolds and Hendrick Automotive Group said that the Reynolds docuPAD system will be installed in all dealership F&I departments throughout the dealer group by mid-July.
Darwin explained what its relationship with RouteOne means.
From the dealer’s website, a consumer can select their vehicle, briefly describe their driving habits, select payment options and then receive a 100 percent accurate payment. After being educated on the available protection and accessories, the consumer can opt to save even more time and get approved via the RouteOne integrated credit application.
Darwin Online then can send the detailed deal structure inclusive of qualified customer and vehicle incentives and programs, insurance products, as well as any trade detail, if applicable. Dealers have full control over how much of the process is automated via their online retail services configurations.
If the dealer chooses no further automation, notifications are immediately sent to assigned dealership personnel, and direct consumer engagement occurs.
If the dealer chooses further automation, credit bureau selection occurs. Depending on the results and deal parameters, the deal automatically can be submitted to select finance companies. This process all can occur in seconds while the customer is still engaged on the dealership’s website.
RouteOne pointed out that that firm can protect dealers from compliance and fraud with a number of free services built into its platform as well as premium subscriptions for those looking for a more encompassing solution, including the dealer’s own privacy policy, Credit Score Disclosure Notices and Red Flag Screening, to name a few.
“Undeniably one of the last pieces of digital retailing yet to be tackled is online F&I,” Darwin Automotive chief executive officer Phil Battista said. “Dealers need to adopt digital retailing technology that directly addresses and prominently promotes both the ‘F’ and the ‘I,’ or there will be one less profit center for them to count on.
“With our RouteOne partnership, Darwin Online continues the evolution of digital retailing in F&I, allowing customers to shop the way they demand,” Battista continued. “We offer dealers F&I everywhere — the ability to educate and sell F&I protection to customers wherever they choose to engage your dealership and our dealers are profiting from this immensely.”
Darwin Online interfaces with more than 142 different product providers and allows dealerships to control their profitability and disclosure. It can interact with all dealership websites without any need for DMS integration. The platform can provide accurate payments that match the dealership’s DMS to the penny.
The provider noted that studies show that 63 percent of online consumers surveyed said they would be more likely to buy F&I products if they were educated about them before they came into the dealership. Darwin Online can prescribe products the customer needs 24 hours a day, 365 days a year.
Approximately 2,500 dealerships have enrolled in Darwin Automotive’s F&I software in just the past two years.
For more information, or to schedule a product demonstration, call (732) 781-9010 or visit www.darwinautomotive.com.
Hendrick adds the Reynolds docuPAD System in all dealerships
As mentioned, Reynolds and Reynolds and Hendrick Automotive Group recently announced that the Reynolds docuPAD system will be installed in all dealership F&I departments throughout the dealer group by mid-July.
Overall, Reynolds will install more than 350 docuPAD system workstations in the 96 Hendrick Automotive Group dealerships, with a large portion of those installations already having occurred. Headquartered in Charlotte, N.C., Hendrick Automotive Group will be the largest single user of the docuPAD system in the United States.
“The docuPAD system has proven itself everywhere it’s been installed,” said Bob Brockman, chairman and chief executive officer of Reynolds. “I’ve always admired Hendrick Automotive Group as disciplined and well run.
“Adding the docuPAD system to their F&I functions will help them take another step forward in the efficiency and effectiveness of their operations and in generating better financial returns in F&I,” Brockman continued.
Installing the docuPAD system also can enable Hendrick Automotive Group stores to adopt Reynolds eWorkflow, an end-to-end digital solution for creating and processing a deal and securing funding using eContracting. Hendrick Automotive Group dealerships are already using electronic deal jackets and eliminating the stacks of paper that go to the accounting office, the lender and the consumer.
Reynolds eWorkflow also can improve dealership cash flow by cutting contracts-in-transit time and facilitating faster funding of deals. Additionally, it reduces document storage costs.
“The people at Reynolds are true partners who share many of our company’s core values,” said Rick Hendrick, chairman of Hendrick Automotive Group. “Continuous improvement has been a long-standing focus for our company. The combination of Reynolds’ leading technologies and close working relationship with our team members is helping our dealerships take care of a whole new generation of customers.”
The Reynolds docuPAD system is well established in dealerships across the automotive industry as an effective way to increase financial returns in F&I offices, while also reducing errors in the F&I process and safeguarding a dealer’s compliance efforts. At that same time, the docuPAD system completely changes the consumer experience in F&I.
“Reynolds is working with our dealerships on becoming more efficient, helping reduce storage costs, and simplifying compliance needs,” said Robert Taylor, vice president of Hendrick Automotive Group information technology. “These new technology platforms are also fully interactive and allow our team members and customers to go seamlessly through an interactive F&I process. They are interchangeable, giving our individual F&I departments the ability to customize the process, fit the needs of their customers, and improve the overall dealership experience.”
Dealerships across the industry last year closed approximately 1.6 million vehicle sales using the Reynolds docuPAD system, which is an increase of more than 30 percent over 2016. On average, those dealerships also realized increased gross profit in F&I operations, according to Reynolds.
Looking ahead, Reynolds projected that 2 million vehicle sales will be closed through the docuPAD system in 2018.
“All of us at Reynolds are extremely proud to work with the people across Hendrick Automotive Group,” Brockman said. “We recognize that their customers expect a rewarding, convenient, and efficient experience. We believe the new solutions we’re providing will help every Hendrick Automotive Group store deliver that experience more effectively and profitably.”
Along with highlighting the fruit of its collaboration with Dealer Marketing Services, Equifax also released findings from its latest consumer automotive survey, analyzing automotive shopping and buying behaviors across prime and subprime credit buyers, as well as millennial and Baby Boomer age groups.
Among the key takeaways from the survey, Equifax determined prime and subprime millennials expect to spend the same amount on their vehicles, and subprime millennials say they are more aware of their credit situation compared with subprime Baby Boomers.
The online survey was conducted by Equifax during February and included more than 1,000 participants.
Other findings included:
• Prime millennials (70 percent) and subprime millennials (64 percent) are similarly likely to understand their credit situation.
• However, 78 percent of prime Baby Boomers are aware versus just 53 percent of subprime Boomers.
Equifax suggested these findings might generate an opportunity for dealers and finance companies to empower subprime consumers earlier in the underwriting process through online shopping in regards to their credit risk situation. This educational opportunity may help avoid surprises at the dealership, which can lead to lost sales and lower customer satisfaction.
The survey also illustrated that subprime millennials expect to spend the same amount on a vehicle — roughly $20,000 — as their prime Millennial counterparts. However, subprime borrowers are less likely to negotiate (25 percent less likely) than prime counterparts.
“Online resources available today have helped millennials become more educated and savvy shoppers along with their Boomer counterparts,” said Rebecca Kritzman, senior director of automotive marketing at Equifax.
“Even though the Internet has provided many of these educational resources, we believe auto dealers and lenders can play an even bigger role in helping to guide and advise these customers before and during each transaction,” Kritzman continued. “A larger emphasis here can help customers avoid defaults in their loan, thus increasing the number of shoppers that return for repeat purchases in the future.”
Additionally, Equifax found that subprime and prime millennials place a higher value on input from their family and friends when seeking advice on affordability before obtaining a loan versus Boomers. However, subprime millennials (11 percent) are much less likely to rely on banks and credit unions versus prime millennials (25 percent) when seeking input on vehicle affordability.
Considering the number of “underbanked” individuals that fall into this subprime category, Equifax recommended that dealers should again look at this trend as an opportunity to help advise on the realistic price point for purchase, given their overall financial picture, and look at educating influencers as well.
Equifax and ProMax partner to boost online financing capabilities
In light of what the survey data highlighted, Equifax and Dealer Marketing Services are continuing to team up to help dealerships and finance companies.
To empower online auto shoppers with access to their credit scores earlier in the loan process and make their time in the F&I office more efficient and productive, Dealer Marketing Services — the maker of ProMax — are using several auto products and solutions powered by Equifax. Since 2016, ProMax has used the Equifax suite of auto products to generate high quality leads, target the right in-market shoppers, convert website visitors and service customers into buyers, verify employment and income and speed up the overall sales process.
Last year, the union with Equifax enabled ProMax’s dealers to convert more than 180,000 online visitors into high-quality leads.
Additionally, ProMax uses The Work Number from Equifax Workforce Solutions to improve the consumer experience by verifying borrower employment and income in real time to eliminate the need for borrowers to present physical paystubs and W2s. The Work Number database contains employer-provided payroll records, including more than 80 percent of Fortune 500 companies, plus a majority of federal government civilian employers. Results from the database can also help instantly clear some bank stipulations, leading to quicker funding of contracts.
To date in 2018, ProMax has used The Work Number to verify income and employment for more than 25 percent of more than 40,000 deals.
ProMax offers a full front end software suite to automotive dealers and a strong track record of innovative and award-winning credit solutions. With Equifax, ProMax is able to centralize requests for credit reports, scores, employment and income verifications and more with one partner.
“We’ve had tremendous success offering these Equifax products to dealers and subsequently consumers, too,” said Shane Born, chief operating officer of Dealer Marketing Services. “Generating and qualifying leads is the lifeblood of the auto business, and Equifax’s suite of consumer credit and digital marketing solutions makes the process easier than ever.”
The Work Number database, managed by Equifax, is one of the nation’s largest centralized repository of payroll data. In 2017, Equifax delivered double digit record growth to its database, benefitting operations such as Dealer Marketing Services.
“Consumers expect a better, more personalized shopping experience, and aligning the right vehicle to a consumer’s budget is an important, often overlooked piece,” said Lena Bourgeois, Equifax vice president of the enterprise alliance automotive division.
“ProMax understands this and has taken the necessary steps to ensure they are an early adopter and innovator in the market,” Bourgeois continued. “The process has become so simple that income and employment verification will become an industry norm.”
An automated verification solutions provider that’s flourishing in the mortgage space now is bringing its technology into auto finance.
Start-up company TurboPass, which is powered by FormFree, says its tool can eliminate the hassle and risk associated with traditional asset and net income verification. Instead of requiring potential vehicle buyers to submit paper or electronic bank statements, TurboPass can use augmented intelligence to analyze data sources directly from financial institutions. In seconds, TurboPass can generate a digital report that fulfills finance companies’ need for copies of PDF or paper bank statements.
The engine for the solution is provided by FormFree and its flagship technology, AccountChek. The provider claims AccountChek is the first and only patented automated verification of assets and deposits (VODA) solution for mortgage lenders that is accepted by government-sponsored enterprises (GSEs). Winner of the 2013 Mortgage Technology Fix-It Award and used by more than 200 mortgage lenders, AccountChek can collect data directly from virtually any financial institution and generates reports in just minutes, creating enormous time savings in the mortgage origination process while eliminating the need for borrowers to submit paper bank statements.
“Very few technology companies have the potential to change an entire industry. FormFree is one of them,” said Brent Chandler, founder and chief executive officer of FormFree. “When coupled with other proven products, AccountChek is a much broader tool than income verification because of the extraordinary wealth of asset and income data that it collects, analyzes and delivers. Most importantly, it virtually eliminates the potential for fraud in the borrower approval process. I’m a big believer in FormFree’s mission to make lending a faster, safer and more confident experience for everybody.”
And with fraud becoming for a problem in auto financing, TurboPass highlighted the ways it can deliver a compliant report:
• Tap more than 15,000 data sources and complete millions of API data calls daily.
• Use augmented intelligence and data analytics — including more than 1,000 proprietary algorithms — to maximize data accuracy.
• Seventy-four percent of data comes directly from financial institutions.
• Present unstandardized data from thousands of financial institutions in one standardized format for partners’ ease of consumption.
• Both FormFree and its aggregator routinely perform automated and manual data quality checks.
• Support all asset account types, including retirement, savings and checking.
Company leaders insisted that submitting information through TurboPass is significantly more secure than emailing, faxing or mailing sensitive financial documents because of these reasons:
• Undergo rigorous lender, investor and third-party audits as well as annual penetration and vulnerability testing.
• Maintain SOC 2 and ISO/IEC 21002:2015 security certifications.
• Hosting partner, Microsoft Azure, is SSAE 16, SOC 2 and Cloud Security Alliance CAI certified.
• Data used is encrypted at rest and in transit, monitored in real-time and secured behind firewalls and 2048-bit security keys.
• Segregate asset data and borrower credentials in separate systems protected by both hardware and software encryption and ensure credentials are never visible to, or accessible by, any human.
• Only pull asset data with express consumer permission.
“You can rely on us for regulatory compliance,” TurboPass said. “Our ‘open door’ audit policy allows partners to conduct virtual and on-site audits as needed.”
For more details, go to www.nostips.com.
RouteOne and MaximTrak are continuing to respond to consumer demand for streamlined, digital completion of vehicle delivery.
On Wednesday, the companies announced they tried to enhance the consumer experience with the ability to include MaximTrak aftermarket documents in the RouteOne eContracting package for a single, electronic customer signing ceremony.
Officials believe this functionality can enable the fastest and easiest, secure electronic consumer signing experience on the market and allows for distribution of all F&I documents from one portal.
As the vehicle purchasing process changes at an increasingly rapid speed, consumers and dealers alike expect consistency, transparency, and most importantly, ease of use. There must be a seamless transition across all F&I channels.
One year ago, RouteOne and MaximTrak began to unify their technologies to innovate the sales process and deliver on the vision of a complete sales and F&I solution that meets OEM, dealer and consumer needs.
“This is just one of many exciting ways RouteOne and MaximTrak are aligning our combined technologies to benefit our dealer customers by bringing the “F” and the “I” together for one cohesive user experience,” said Imran Mussani, MaximTrak’s vice president of product development and operations.
This single, digital signing ceremony brings RouteOne’s 6,700 active eContracting dealers the ability to include aftermarket documents from MaximTrak’s 110 insurance providers.
Dealers interested in streamlining their F&I process can contact their RouteOne business development manager at (866) 768-8301 or www.routeone.com/salesteam.
Fitch Ratings is keeping a close watch on how subprime auto finance paper is performing in a similar fashion to Equifax and TransUnion.
Analysts indicated that loss frequency and severity ticked up slightly from historically low levels for the largest U.S. auto finance companies, according to the latest U.S. Auto Asset Quality Review from Fitch Ratings.
Excluding General Motors Financial — whose credit performance continues to benefit from a significant portfolio mix shift — Fitch highlighted the average net charge-off rate for finance companies covered in this report increased to 0.95 percent in the fourth quarter compared to 0.92 percent in the closing quarter of 2016.
Likewise, analysts noted delinquencies increased in Q4, with the 30-day delinquency rate ticking up to 3.07 percent as 2017 finished. A year earlier, Fitch pinpointed the rate at 2.86 percent.
“We continue to see a divergence in subprime credit relative to prime credit and expect performance to weaken further in 2018 due partially to the expansion in recent years of less-tenured, independent auto finance companies that have demonstrated higher-risk appetites and less underwriting discipline,” Fitch senior director Michael Taiano said.
Just like Equifax mentioned, Taiano pointed out that underwriting for vehicle installment contracts and leases continued to tighten for banks during the second half of last year — albeit at a more moderate pace — which Fitch views as a credit positive.
The Fitch expert explained the tighter standards are likely in response to deterioration in used-vehicle prices and weaker credit performance in the subprime segment. After a respite in during the second half of 2017 that was partially due to increased vehicle demand stemming from the hurricanes in Texas and Florida, Fitch expects further deterioration in used-vehicle prices in 2018 to be driven by increases in off-lease vehicles, elevated new-model incentives and tighter subprime financing.
Taiano went on to stress that lower used-vehicle prices will put downward pressure on finance companies’ recovery values and lease residuals, resulting in higher credit losses.
“The outlook in 2018 for auto asset quality is clouded to some extent by macro crosscurrents. Positive indicators including greater household net worth, low unemployment and increased wage growth are countered by rising consumer debt levels, weaker used vehicle prices and rising interest rates,” Taiano said.
The complete report, U.S. Auto Asset Quality Review: 4Q17, is available to premium subscribers at www.fitchratings.com.
PointPredictive understands criminals looking to orchestrate auto finance scams aren’t sitting idle.
On Tuesday, PointPredictive announced the launch of a new patent pending solution called Synthetic ID Alert. The solution is a complement to the company’s comprehensive application fraud scoring solution Auto Fraud Manager.
Synthetic ID Alert can help auto finance companies stop synthetic identity fraud by producing alerts on applications that exhibit patterns consistent with synthetic ID fraud. This sophisticated machine learning AI is quickly and easily installed within a lender’s technology system to be used in real-time application review.
“Auto lenders participating in our consortium meetings have identified that one of their top three issues this year is solving synthetic identity fraud. Our analysis shows that synthetic identity fraud accounts for 15 to 20 percent of fraud and misrepresentation losses across the industry. This equates to more than $1 billion in synthetic identity originations this year,” said Eric Werab, vice president of fraud and product strategy at PointPredictive.
“Synthetic identity thieves have figured out that credit scores and reports can be manipulated through schemes such as trade line piggybacking, which can artificially inflate their credit scores.”
Synthetic ID Alert scores applications based on patterns of fraud that fraud data scientists have identified in millions of historical automotive applications. This solution understands the logistics of social security number issuance, the interconnections between each of the pieces of information supplied on the application by the dealers and borrowers, and how all of these compare to proprietary and statistical norms accumulated from historical applications, dealer performance and fraud ring patterns.
If the solution determines that an application has a high likelihood of synthetic identity, a score and actionable reason codes are provided to the finance company so they can take immediate steps to prevent funding the fraudulent installment contract.
With this solution, PointPredictive projected that finance companies will need to act on less than 0.5 percent of their total application population to stop a significant portion of their synthetic ID fraud.
“Our proprietary machine learning algorithms are built on over 40 million historic applications and are capable of instantly identifying a pattern of synthetic identity. We wanted to create a simple, easy to install and use solution for lenders to solve a specific need,” PointPredictive chief executive officer Tim Grace said.
“With Synthetic ID Alert, we think we can help lenders identify a significant portion of their synthetic identity fraud applications before they approve the loans that will lead to losses,” Grace continued.
The solution is available immediately to finance companies as an application that can be installed in less than a day on existing technology systems. We also plan to offer this installation to our partner loan origination and solution providers.
To receive more information about Synthetic ID Alert, or to request the firm’s latest white paper entitled, “How Hidden Fraud & Misrepresentation are Contributing to the Rise in Default Rates,” send a request through www.pointpredictive.com or directly to [email protected].
Experian acknowledged that traditional credit attributes provide immense value for auto finance companies when making decisions. But when used alone, Experian insisted they are limited to capturing credit behavior during a single moment of time.
To add a deeper layer of insight, Experian recently unveiled what company executives called the industry’s first tri-bureau trended attributes, aimed at giving finance companies a wider view into consumer credit behavior and patterns over time.
Ultimately, Experian insisted this enhanced detail can help auto finance providers expand into new risk segments and better tailor credit offers to meet consumer needs.
An Experian analysis shows that custom models developed using Trended 3D attributes provide up to a 7-percent lift in predictive performance when compared with models developed using traditional attributes only.
“While trended data has been shown to provide additional insight into a consumer’s credit behavior, lack of standardization across different providers has made it a challenge to gain those insights,” said Steve Platt, Experian’s group president of decision analytics and data quality.
“Trended 3D makes it easy for our clients to get value from trended data across all three credit bureaus in a consistent manner, so they can make more informed decisions across the credit life cycle and, more importantly, give consumers better access to lending options,” Platt continued.
Experian’s Trended 3D attributes help finance companies unlock valuable insights hidden within credit reports.
For example, two people may have similar balances, utilization and risk scores, but their paths to that point may be substantially different. The solution can synthesize a 24-month history of five key credit report fields — balance, credit limit or original loan amount, scheduled payment amount, actual payment amount and last payment date.
As a result, Experian explained that finance companies can gain insight into:
—Changes in balances over time
—Migration patterns from one tradeline or multiple tradelines to another
—Variations in utilization and credit limits
—Changes in payment activity and collections
—Balance transfer and debt consolidation behavior
—Behavior patterns of revolving trades versus transactional trades
Additionally, Trended 3D leverages machine learning techniques to evaluate behavioral data and recognize patterns that previously may have gone undetected.
To learn more information about Experian’s Trended 3D attributes, go to this website.
Brian Landau, senior vice president and automotive business leader at TransUnion, needed just one descriptive moniker to summarize the auto finance data from the fourth quarter — a correction.
The auto finance portion of TransUnion’s Q4 2017 Industry Insights Report released on Tuesday showed that while auto finance balances grew 5.5 percent between Q4 2016 and Q4 2017, this figure marked the lowest annual growth rate since a 5.3-percent rise in Q2 2012 over Q2 2011.
Despite a slowdown in balance growth, TransUnion observed a marked increase in the number of outstanding auto contracts — growing to 79.4 million in Q4 2017 compared to 75.8 million one year earlier.
“I believe it is a correction, just like whatever others in the industry might call it, because we’re starting to see not necessarily a sharp change happening with regard to originations or balances,” Landau told SubPrime Auto Finance News ahead of the report release. “It’s more of a slowdown in some parts of the credit spectrum. That to me means it’s a controlled tightening if you will.”
The TransUnion report showed originations also declined on a yearly basis for the fifth consecutive quarter, falling 4.8 percent in Q3 2017. The decline in originations was driven by an 8.2 percent yearly drop for the subprime, near prime and prime credit risk categories, though that was partially dampened by only a 0.2-percent annual decline in the prime plus and super prime risk categories.
TransUnion reiterated that originations are viewed one quarter in arrears to account for reporting lag.
Another important trend mentioned in the report included TransUnion determining that serious auto loan delinquency rates per borrower — contracts 60 days or more past due — also remained stable. The Q4 reading improved 1 basis point to 1.43 percent.
“It’s still a little too early to say whether or not we’re going to continue to see that trend. But it is a positive indicator that a correction is happening,” said Landau, while referencing that the latest rate is more than 20 basis points lower than the reading spotted during the worst of the Great Recession of 2008 and 2009.
So while some stock traders on Wall Street might cringe at the thought of a correction, Landau reiterated how in this case with respect to auto finance it’s an overall positive development.
“As we all know, finance companies have a number of different levers they can pull to match risk,” Landau said. “They can pull back on term. They can require a larger amount down at the point of purchase to reduce that (loan-to-value ratio). They can also adjust APR and the buy rate through the dealer to offset the credit risk that’s constantly changing. They’re always calibrating and recalibrating accordingly.
“The market is pretty resilient as I’ve said before,” he went on to say. “We have a number of people in the industry who have gone through a number of cycles to know what to anticipate. They’re being very proactive to any of the underlying trends they’re seeing. That’s why you’re seeing a slight tightening of underwriting policies and pricing.”
Q4 2017 Auto Finance Trends
| Auto Finance Metric |
Q4 2017 |
Q4 2016 |
Q4 2015 |
Q4 2014 |
| Number of Auto Loans |
79.4 million |
75.8 million |
71.1 million |
65.2 million |
| Borrower-Level Delinquency Rate (60+ DPD) |
1.43% |
1.44% |
1.27% |
1.19% |
| Average Debt Per Borrower |
$18,597 |
$18,391 |
$18,004 |
$17,456 |
| Prior Quarter Originations* |
7.1 million |
7.5 million |
7.5 million |
7.0 million |
| Average Balance of New Auto Loans* |
$20,909 |
$20,743 |
$20,245 |
$19,710 |
*Note: Originations are viewed one quarter in arrears to account for reporting lag. Source: TransUnion
Overall credit trends
TransUnion highlighted that the consumer credit market concluded 2017 on a high note with strong performance across multiple credit products, according to TransUnion’s Q4 2017 Industry Insights Report powered by Prama analytics.
Analysts found that most indicators point to a healthy credit market, though there are a few signals that lenders are being more active in rebalancing portfolio risk.
“Consumers continue to gain access to more credit, and balances are generally rising at a healthy clip,” TransUnion vice president of research and consulting Matt Komos said in a news release.
“For the most part, consumers are paying their debts in a timely fashion, which has been especially evident for mortgages and personal loans,” Komos continued. “This is likely a result of the strong economy, which has helped consumers manage their personal balance sheets and build confidence.”
During 2017, TransUnion observed 20.3 million more accounts spanning auto, credit card, mortgage and unsecured personal loans. Analysts contend the growth is likely due to continued declines in the unemployment rate, which decreased to 4.1 percent in Q4 2017 compared to 4.7 percent in Q4 2016.
Additionally, the University of Michigan’s Index of Consumer Sentiment — a measure of consumer confidence — stood at 95.9 in December 2017, up 2 percent from December 2016.
“This demonstrates consumers have positive expectations regarding the overall economy, and we anticipate this will lead to higher consumer credit activity in the near future,” Komos said.
“While most indicators point to a fluid consumer credit economy, we are monitoring the market closely for any potential shifts,” Komos continued. “Material upticks in delinquency, interest rate increases beyond what is expected, or other unanticipated economic shocks could certainly impact the market adversely.”
TransUnion’s special website here contains more charts and details about the Q4 2017 Industry Insights Report.
Here’s another example of data and research leading directly to development of a solution aimed at smoothing out underwriting, which in turn helps finance companies book more paper and dealerships turn more metal.
Dealer Marketing Services, the makers of ProMax, recently released what the company dubbed Multi-Bureau Solution for its dealer customers.
ProMax explained the Multi-Bureau Solution is a multifaceted strategy for dealers that centers around pulling multiple credit reports for each customer in order to leverage the best credit score and tier into a better and more profitable deal.
The Multi-Bureau Solution comes as a result of a massive study conducted by ProMax over a six-month period in 2017. Using a sample of more than 700 franchised and independent dealerships nationwide, more than 650,000 showroom visitors with more than 1 million credit bureau reports pulled, and over 180,000 vehicle sales were analyzed.
“The analysis of this massive data set was conclusive and unmistakable,” ProMax founder and chief executive officer John Palmer said.
“Pulling multiple credit reports per customer increases both the number of sales and back-end profits,” he said. “It’s that simple. So, we designed an easy to implement solution incorporating everything the study showed us.”
Palmer explained that the study yielded two big innovations in the credit pulling process that are key to the Multi-Bureau Solution: a brand new multi-bureau credit report and major additions to ProMax’s Lender, Review, & Submit functionality.
The new bureau design improves both the look and effectiveness of traditional credit report displays, enabling dealers to compare multiple bureaus side-by-side and get all the information they need at a glance.
The updated Review & Submit screen makes it easier than ever for dealers to configure lenders for maximum effectiveness.
“The Multi-Bureau Solution doesn’t just draw on the landmark six-month study, but on ProMax’s 20-plus years of experience,” ProMax chief technology officer Darian Miller said.
“Credit and compliance have always been two of our greatest strengths. ProMax gives dealers the technology to compare and analyze credit reports and submit the best deals to lenders,” Miller continued.
ProMax pointed to studies that show up to 75 percent of vehicle buyers have credit scores that vary by more than 20 points across all three bureaus. The Multi-Bureau Solution can take advantage of this situation by always finding the best score and tier for the customer.
“Savvy F&I managers know that pulling more than one bureau can bump a prospect’s score and more importantly their tier,” ProMax chief operating officer Shane Born said.
“Even a bump of 20 points can mean the difference between closing the deal or losing the deal; 20 points could be the difference between a better deal or leaving gross profit on the table,” Born concluded.
An important component in subprime auto finance underwriting is gauging the potential contract holder’s ability to make installment payments.
LAUNCHER.SOLUTIONS and Equifax are teaming up to help finance companies with that stipulation.
This week Equifax and LAUNCHER.SOLUTIONS, a technology provider specializing in subprime automotive originations, announced an integration of Launcher’s appTRAKER Loan Origination System with The Work Number database and its repository of payroll data, provided by Equifax Workforce Solutions.
Executives highlighted the appTRAKER Loan Origination System was designed specifically for subprime and near-prime finance companies. Integrating The Work Number with appTRAKER LOS can allow finance companies utilizing appTRAKER LOS to automatically access employment and income information, helping to reduce time and errors that can occur in a manual process.
More than 10,000 employers nationwide are included in The Work Number database of income and employment records, including the majority of federal government civilian employers and 82 percent of the Fortune 500.
Data within The Work Number database updates every payroll cycle.
“Our integration with The Work Number adds value to appTRAKER LOS for our lenders,” said Nikh Nath, president of LAUNCHER.SOLUTIONS.
“The verifications provided by The Work Number can be run automatically or manually, during the underwriting phase or the verification phase,” Nath continued. “The integration allows the quality and flexibility needed to book loans quickly and efficiently.”
Lou Loquasto, vice president, dealer and auto finance leader for Equifax, mentioned that the company expanded The Work Number database substantially in 2017.
“Auto lender confidence in the availability of The Work Number data could reduce consumer requirements to provide income and employment documentation and soon become a table stake for the industry,” Loquasto said.
