Tag Archive | "special finance"

ProMax’s Palmer to Share Loan-Approval Tips at Dealer Summit

TAMPA, Fla. — John Palmer, CEO of ProMax Unlimited, will present “Secrets to Getting More Lender Approvals” at Dealer Summit, organizers announced on Wednesday. The event will be held May 3–5, 2016, at the Sheraton Tampa Riverwalk Hotel.

“If you think of John as a marketing and technology provider, you’re only half right,” said Greg Goebel, president of DealerStrong. “The work he does with ProMax is informed by a highly successful first career in automotive sales, F&I and sales management.”

Palmer is expected to offer a wide range of strategies for F&I and special finance professionals, starting with initial approvals via Dealertrack and RouteOne and continuing with expert advice relating to pre-qualifying showroom visitors, pre-approving online credit applications, seeking out aggressive banks and finance companies, and proven word-tracks and selling techniques that produce larger down payments, more cosigners and more appropriate vehicle selection.

“Learn how to use and maximize today’s cutting edge technology along with old-fashioned, tried-and-tested sales techniques in working with both your prospects and lenders to get more deals approved, delivered and at higher grosses.” Palmer said.

Registration for Dealer Summit is open at the event’s website. Dealers who register by April 1 will enjoy a $100 early-bird discount. For information about exhibition and sponsorship opportunities, contact show chair David Gesualdo via email hidden; JavaScript is required or at (727) 947-4027.

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Tom Hudson Joins Dealer Summit Roster

TAMPA, Fla. — Prominent consumer finance attorney Thomas B. Hudson has agreed to speak at the upcoming Dealer Summit, organizers said Wednesday. The event will take place May 3–5, 2016, at the Sheraton Riverwalk Tampa Hotel. Hudson’s session, “Subprime and BHPH Dealers: How Regulators Have Changed Your Business Model,” will begin at 2 p.m. on Wednesday, May 4.

“Tom Hudson is universally admired as a dealer advocate and unwavering voice of reason,” said Greg Goebel, president of DealerStrong. “We couldn’t have asked for a better speaker to tackle this important topic.”

Hudson is a partner in the Washington, D.C., office of Hudson Cook LLP and one of the automotive industry’s foremost legal minds. He a frequent speaker and prolific writer, authoring a number of legal guides and publications and serving as a regular contributor to Auto Dealer Today and F&I and Showroom magazines.

Hudson is expected to analyze recent enforcement actions by federal regulators and their effect on automotive finance, including special finance and the buy-here, pay-here (BHPH) segment. Dealers must be willing to adapt to a “new business landscape” and change their business models, he warned, or face legal action that could cost them their livelihoods.

“There are two kinds of dealers in the world — those who know that the regulatory ground has shifted beneath them and those who don’t,” Hudson said. “Dealers need to understand and conform to the new rules or get out of the business before the regulators force them out.”

Registration for Dealer Summit is open at the event’s website. Dealers who register by April 1 will enjoy a $100 early-bird discount. They will also have access to several pre-show activities, including F&I Think Tank and Jim Ziegler’s Profit Masters.

For information about exhibition and sponsorship opportunities, contact show chair David Gesualdo via email hidden; JavaScript is required or at 727-947-4027.

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Notable Growth for Subprime Originations, Equifax Reports

ATLANTA — A new report from Equifax revealed notable increases in subprime origination growth across all lending sectors, with subprime borrowers now making up more than 46 percent of the auto finance segment.

According to Equifax’s “National Consumer Credit Trends” report, new credit in 2011 ($782 billion) remained below pre-recession levels, but gained more than 10 percent over 2009 and 2010 levels ($695 and $709 billion, respectively).

Increases in credit limits also were seen in 2011, as total retail credit card limits increased 6 percent year over year from Dec. 2010 to Dec. 2011. Additionally, total bank credit card limits jumped 24 percent from Dec. 2010 to Dec. 2011. Consumer finance credit limits also saw a comparatively modest improvement of $1.2 billion from Dec. 2010 to Dec. 2011, according to F&I and Showroom magazine.

Total consumer debt in the U.S. currently stands at $11 trillion, a decrease of 11 percent from its peak of $12.4 trilling in the fourth quarter 2008. The drop is driven by a nearly 12 percent decrease in home financing balances, which fell from $9.8 trillion in 2008 to $8.7 trillion in February 2012. Non-mortgage and non-student consumer debt balances also fell sharply (22 percent) from the early 2008 peak of $2.05 trillion. After reaching a post-recession low of $1.60 trillion in May 2011, consumer debt balances have risen about 2 percent.

“The evidence of increased lending to subprime consumers demonstrates banks’ ongoing efforts to grow lending by providing credit opportunities to more consumers,” said Equifax Chief Economist Amy Crews Cutts. “Year-over-year results show borrowers are taking advantage of the new opportunities and seeking to diversify their financial activity, which is building momentum toward economic improvement.”

Other notable findings from Equifax’ March Credit Trends Report include:

Auto Finance

  • Subprime borrowers are gaining share in new auto loan originations, especially in the auto finance segment where they now make up over 46 percent of the market. Prime borrowers account for a larger share (83 percent) among auto bank originations, but have also lost share over the past two years to subprime borrowers.
  • New auto finance loan amounts increased $11.6 billion from 2010 ($164.6 billion) to 2011 ($176.2 billion), hitting the highest originations level since 2007 ($221.1 billion).
  • Auto bank loan amounts were up 14 percent from 2010 ($162.1 billion) to 2011 ($187 billion), nearly reaching pre-recession levels.
  • The number of new auto loan originations increased over 2 percent from 2010 ($17.3 million) to 2011 ($19.6 million). The 2011 figure surpasses 2008 totals but remains 9 percent lower than the six-year high of $21.5 million reached in 2007.
  • Severe delinquency rates for auto finance loans are worse than for auto bank tradelines, however, both rates have fallen back to pre-recession levels.
  • In 2011, total new auto loan originations hit a 6-year high for the month of December, although total originations for the year were at a 4-year high.

Bank Credit Cards

  • Lending to subprime consumers showed a 41 percent increase from 2010 to 2011, as subprime borrowing hit a four-year high in Dec. 2011 with 1.1 million new bank credit cards issued.
  • New subprime card limits grew 55 percent from 2010 to 2011. At $12.5 billion in 2011, bankcard limits are at their highest level since 2008 ($27.4 billion).
  • Bank credit card growth continues, but is still well below pre-recession levels. In 2011, 39.9 million bankcards were opened, an 18 percent increase from 2010 and the highest total since 2008.
  • The increase in total bank credit card originations was accompanied by a 31 percent increase in total credit limits from 2010 to 2011. Last year marked the first time in more than four years that credit lines increased, reaching $163 billion.

Consumer Finance

  • New consumer finance loans originated in 2011 (20.2 million) were up more than 4 percent from 2010 (19.4 million), the highest point since 2008 (24.8 million).
  • Delinquency rates are on the decline, dropping to 7 percent in February 2012, the lowest level since July 2007.
  • From 2007 to 2010, consumer finance loan originations were falling, but the trend reversed in 2011 with $1.2 billion of new loan amounts added.
  • New consumer finance originations for the month of December reached $5 billion in 2011; the last time December originations were that high was in 2008 ($5.1 billion).
  • Consumer finance loans have typically served high-risk consumers, but in February 2011, low-risk borrowers became dominant in the segment. As of February 2012, a little more than 33 percent of consumer finance loans (by dollars) were to high-risk borrowers, while 39 percent were to low-risk borrowers.

Retail Credit Card

  • In early 2009, the share of retail card balances held by low-risk borrowers started increasing markedly. Today, low-risk borrowers hold just less than 42 percent of retail card balances, followed by high-risk borrowers who now make up nearly 26 percent of balances outstanding.
  • From 2010 to 2011, there was a 4.7 percentage point increase in retail card originations to subprime borrowers, making up 31 percent of 2011 retail credit card originations.
  • Retail credit card limits grew almost 6 percent in 2011, totaling $60 billion for newly originated cards.
  • New retail card tradelines in December 2011 showed a 4 percent increase over the same month a year ago, adding 4.2 million new accounts.
  • The decline in total retail card limits appears to be nearing a bottom as delinquency rates and write-offs show continued declines.

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Auto Finance Companies Originating More Loans Than Banks, Credit Unions, Equifax Reports

ATLANTA — The latest Equifax National Credit Trends Report revealed that auto finance companies have increased lending by more than 47 percent over the past two years. Auto finance lenders also have outpaced bank and credit union in lending to subprime borrowers over the same time period.

The report indicated that there were 854,800 auto finance company-originated loans in July 2011 vs. 581,300 for July 2009. Auto loans made to subprime borrowers now account for 38.5 percent of all auto loan originations for auto finance companies and 17.6 percent for banks and credit unions — numbers that are quickly approaching pre-recession levels, reported F&I and Showroom magazine.

By contrast, 820,200 loans were originated by banks and credit unions for the same period in July 2011 vs. 832,000 for July 2009, a decrease of less than 2 percent, according to Equifax.

Delinquency rates continue to improve for outstanding auto loans currently 60 or more days past due, which have fallen to 1.63 percent of loans. The improvement reflects a continuation of sustained credit retraction that the auto lending industry has experienced earlier than other lending segments, said Michael Koukounas, senior vice president of Special Client Services for Equifax.

“With unemployment rates remaining elevated for a prolonged period, auto lenders have proactively adopted more comprehensive data and verification tools for greater loan-level transparency in evaluating a wider band of consumers, which has helped enable the auto lending industry to recover more quickly than others,” he noted.

In July 2011, 1.7 million auto loans worth $32 billion collectively were originated, according to Equifax. From January to July 2011, 11.3 million new auto loans worth a collective $213.9billion (a 14.8 percent increase vs. the same six-month period last year) had been originated, a 13.2 percent increase over January-July 2010 totals.

The report also revealed that average monthly payment has remained relatively unchanged over the last year, signaling that the growth the industry is experiencing is tied to increases in number of loans rather than an increase in average loan amount, Koukounas added.

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F&I Conference, Special Finance Conference To Join Forces For Industry Summit 2011

TORRANCE – The publishers of F&I and Showroom and Special Finance Insider have announced that SFI’s Special Finance Conference, traditionally held each August in Dallas, will join the eighth annual F&I Conference and Expo at Industry Summit 2011 this September in Las Vegas.

Greg Goebel, publisher of SFI and Auto Dealer Monthly, is widely regarded as the nation’s leading special finance trainer. The Special Finance Conference’s educational slate is designed to offer an unrivaled subprime auto finance education. Goebel, along with experts from top finance companies and suppliers, offers instruction ranging from basic operations to advanced deal structuring, benchmarking and more.

“I am excited for our two companies to join forces in order to hold what should be the premier event in automotive finance — whether it be for prime or subprime credit,” Goebel said. “This absolutely guarantees there will be something for everyone — there is no way to come and not improve your business!”

David Gesualdo, show chair of Industry Summit and publisher of F&I and Showroom, agreed. “The Special Finance Conference is, without a doubt, the leader in the subprime auto finance segment,” he said. “We are honored to welcome Greg to Industry Summit 2011. Having SFC and FIC under one roof will indeed make this the premier event in our industry.”

Industry Summit 2011, which also will include the annual Vehicle Service Contract Administrators Conference, will be held Sept. 26–28, 2011, at the Las Vegas Hilton. Registration is expected to open soon. Attendees can visit Industry Summit website to sign up for e-mail updates.

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