NAF Association Announces Dates for Next Nonprime Conference
HANOVER, Md. — On Monday, the National Auto Finance Association announced that its 12th Annual Non-Prime Auto Financing Conference will be held June 4 to 6 at the Renaissance Worthington Hotel in Fort Worth next year.
The goal of the event is to offer education opportunities for creditors and dealers. Officials said the conference is open to both members and non-members.
SubPrime Auto Finance News was on hand for this year's 11th Annual Non-Prime Auto Finance Conference.
It featured experts covering a variety of topics, such as the Hispanic market, underwriting, a rating perspective of the nonprime market, legal compliance and much more.
During the conference, Jack Tracey, executive director of the association, touched on some trends he's seen impact the group's members and the industry over the past year.
One of the first topics he discussed was the bottom dropping out of the subprime mortgage sector and the view of some industry watchers that it could occur in the auto financing market.
"We went through improper underwriting about 10 years ago," he pointed out, noting that the auto industry has already corrected itself and learned from past mistakes.
However Tracey did point out his concern that as the cost of older inventory increases, nonprime lenders will continue extending loan terms to offset the higher cost.
"We fill the day and a half with presentations designed to appeal to our finance company and dealer members and the room stays full, which tells us we are on the right track," Tracey said.
"We had 22 new member (companies) join the association over the past year," he reported. Moreover, he said the number of survey responses for the 2007 Nonprime Automotive Financing Survey came in at a record level.
Discussing the nonprime industry survey later in the conference was George Halloran, of BenchMark Consulting International, representing the company that compiles the results.
Among the preliminary findings, he reinforced Tracey's concern regarding loan terms by reporting that trend toward longer contracts has continued. As in years past, an executive from Benchmark will likely be on hand to discuss preliminary findings again at next year's event, with the full report released later in the year.
Kicking off the 2007 nonprime conference with the keynote speech was the host of the weekly CBS radio show called "Auto Scoop."
Radio personality Adam Goldfein quickly pointed out to attendees that the Internet has "flipped the car-buying process on its head."
In past years, he noted that consumers generally would take months to decide on a vehicle; however, thanks to the Internet, consumers now have more resources than ever to research and get their credit scores.
Today, consumers are usually ready to purchase in about a month or two. When it comes to consumers with nonprime credit, Goldfein reiterated what many in the industry know: Purchasing a car is more a need than a want or desire to stay with current trends.
"The Web is not barred from people who are not prime," he told the audience. "And there is tremendous difference between finance companies who work in prime and nonprime."
Many consumers with subprime credit are falling into the trap of thinking what they've learned on the Internet works for them, he explained. However, many sites are more geared for folks with prime or near prime credit.
"I challenge finance companies to bring consumers more information on nonprime," he told conference attendees. "Think about focusing tools for the consumer. Why do banks not have the retail cache that insurance companies have? Brand yourself on the retail level as well as the wholesale level."
He went on to challenge financial institution representatives in the audience to think outside of the box to build their brand.
"Consumers tend to think they have a three-day right to return a car," he stated. "Why isn't there that right? Why is the credit union the choice? Why aren't you the choice? Who will do the deals in bankruptcy? Who will deal with repossessions (on a consumer's credit history)?
"Do you have rate limitations? Make people feel like they're getting a better rate," he stressed. "Think about creating a brand."
When launching into his presentation on the Hispanic market further into the conference, Juan Faura, president, chief executive officer and founder of Cultura, introduced himself by saying, "I am a marketing and advertising guy."
Faura asked attendees of the 2007 conference questions such as, "Do you accept non-traditional forms of identification? Are you willing to lend to Hispanics without a FICO score?"
He pointed out that a few of the cities with the biggest Latino populations include Los Angeles, New York, Miami, Chicago and Houston.
Another important thing to keep in mind when marketing to Hispanics in various regions is their country of origin, or country their relatives are from, Faura noted.
For example, Latinos prevalent in the South West, such as California, are typically of Mexican descent. Whereas, in Chicago, Hispanics tend more likely to be of Puerto Rican or Mexican heritage, he explained. Miami, of course, is primarily a Cuban town.
Fuara also said that "Many Hispanics prefer to function in Spanish but will watch "Desperate Housewives" or "Dancing with the Stars." They do this because of content. There is nothing like it available in Spanish."
For the Latino population, trust is the key, he said. They prefer face to face interactions, he added.
"They want you to understand their situation is a little different, but that they will pay you back," Fuara said.
Program details and registration information for the 2008 conference will be announced later. For more information on the association, visit www.nafassociation.com.