© Can Stock Photo / Pakhnyushchyy

Nicholas Financial is looking to expand its direct lending footprint into Ohio.

Clearwater, Fla.-based Nicholas already offers a direct loan product in three states. “We have not only been able to increase our focus on direct loan production in Florida and North Carolina, but we are now writing direct loans in the state of Georgia and have applied for our license to conduct this business in the state of Ohio,” President and CEO Doug Marohn said in an earnings statement yesterday. “Nicholas will continue to evaluate other states in our network for expansion of the direct loan product. We believe this product line compliments our core business well and aligns extremely well with our branch-based model.”

Meanwhile, Nicholas’s indirect loan volume has declined or 24.5%, to $40 million, for the six months ended Sept. 30.

The company started to modify underwriting guidelines midway through the year to improve the quality of the contracts it purchased. These modifications included an enhanced review process for approved applications and the use of alternative data. By tightening underwriting guidelines, credit losses improved 17.5% year-over-year.

“Our renewed focus on financing primary transportation to and from work for subprime customers is continuing to have a positive impact,” Marohn said. “Prior [consumer] pools are still presenting a challenge and continue to produce losses of greater severity and frequency than more recent pools, however, we are happy overall with even the prior pools’ performance due to improved servicing and operational controls.”

Net income for the September quarter increased 69% year over year, to $582,000. Accounts 61-or-more days delinquent decreased to 4.1% YOY, excluding Chapter 13 bankruptcy accounts.

“The key performance indicators on our purchases over the last three quarters continue to reflect our disciplined approach regarding proper pricing and structure on purchases,” Marohn said.

Source link

Turn Your Bulk Auto Notes Into Cash

LAS VEGAS — Wells Fargo Auto is confident in the current health of the economy and auto industry, but the Federal Reserve’s rate hikes are slowing down portfolio growth, Jerry Bowen, executive vice president, told Auto Finance News during the 2018 Auto Finance Summit last week.

“There’s always a risk of unexpected events that could cause some turmoil in the economy,” Bowen said. “The risk we are most attentive to as we head into 2019 is the increase in rates that’s starting to slow down growth a little bit. If the Fed is a little too aggressive, that could start the [downturn] cycle.”

With the future interest rate environment in mind, Wells Fargo has to determine how to optimize growth if its portfolio continues to shrink, Bowen said. Wells Fargo Auto’s portfolio declined in the third quarter to $46.1 billion, according to its earnings released earlier this month.

However, rate hikes impact consumers most since the cost of financing vehicles will become higher. As such, Wells Fargo works to provide a strong customer experience by increasing efficiency with consumers and dealers.

“We’ve transformed our business over the last 18 months with the focus on how we better serve our customers,” Bowen said. “On the dealer customer side, we’re doing everything in our power to make us faster, more efficient, and easy to do business with. Our ability to do that helps the dealer better serve the consumer customer.”

As for Wells Fargo’s customers, the bank has updated its onboarding process to increase transparency with loan terms. “We’ve improved our onboarding process to make sure that when we make a loan to a consumer that the terms are exactly what the consumer thought they were getting,” Bowen said.

Check out the exclusive interview below.

[vimeo 298305526 w=100 h=360]

Source link

Turn Your Bulk Auto Notes Into Cash

Photo by Mike Mozart via Creative Commons

Santander Consumer USA drove origination growth 52% year over year, the company reported in its third-quarter earnings released today.

However, executives on the company’s earnings call failed to address Fiat Chrysler Automobiles Group’s plans to form its own captive.

“We do not have further updates on those discussions,” Chief Financial Officer Juan Carlos said during the call. “FCA is still planning on making its own U.S. captive.”

Auto loans from Chrysler Capital are a substantial contributing factor to SCA’s origination growth, which has been a central focus for Santander since a strategy enacted last fall. Chrysler Capital loan originations rose 34% year-over-year to $2.4 billion, while leases increased 73% to $2.9 billion.

Meanwhile, total auto originations shot up to $7.6 billion, and the subprime lender’s net income grew 17% to $232 million.

“We had good, strong originations across all channels, especially Chrysler Capital,”  Scott Powell, president and chief executive of Santander Consumer, said during the earnings call. “We’ve made progress on the regulatory front, as well, and our results reflect our continuing focus on the dealer and consumer experience.”

This year, the company has been able to resolve a series of regulatory compliance issues. Last August, the Federal Reserve Bank of Boston released Santander from regulatory restrictions imposed in a written agreement in July 2015. The lender’s parent bank was also released from a consent order issued by the Office of the Comptroller of the Currency.

Source link

Turn Your Bulk Auto Notes Into Cash

Credit Acceptance Corp. headquarters in Southfield, Mich., via Yelp

Net income at Credit Acceptance Corp. shot up 50% year over year in the third quarter, though average volume per active dealer declined — 2.9% — for the first time in 2018, Chief Executive Brett Roberts said in an earnings call yesterday.

“This quarter was down a little bit from the trend line, and volume per dealer was the culprit,” Roberts said. “We don’t have any explanation other than we expect the competitive environment has something to do with it.”

Despite the decline in volume per active dealer, Credit Acceptance added nearly 1,000 dealers to its network — a 12.2% increase from 3Q17. An increase in the number of dealers helped push loan volume up 9.4% year over year, to 86,005 units.

“The best measure is a forecast for every contract we originate,” Roberts said. “We have a forecast for how that contract will perform. The message from this quarter — and really the last several quarters — is that the forecast is very stable.”

Credit Acceptance’s forecasted collection rates improved last quarter to 63.8%, compared with 63.5% when the loans were originated.

“We have benefited from operating expenses or operating leverage over a long period of time as we’ve grown,” Roberts added. “So that’s what contributed to the improvement.”

Source link

Turn Your Bulk Auto Notes Into Cash

                      Courtesy of Kaboompics

LAS VEGAS — Personalization and transparency are top priorities in Toyota Finance Services‘ Lexus Complete Lease program, slated to launch in the first quarter of 2019.

The program is one of nearly half a dozen pilot programs the OEM has launched, including Flexible Lease through Uber, Car Sharing pilot in partnership with Get Around, and short-term lease pilot though Launch Mobility.

“We’ve done a lot of pilots, focus groups, and tests,” Matthew Heydon, TFS group manager, retail transformation, said at the 18^th annual Auto Finance Summit last week.

In September TFS announced that the 24-month, 20,000-mile limit program would bundle lease payment, car insurance, and maintenance coverage.

“Customers want personalization and transparency,” Heydon said. “For automotive, it’s transparency of price, transparency of a process.”

Toyota hopes the new pilot will offer simplicity through one payment for multiple services. The new leasing offer also aims to simplify processes. “We thought it was time, so we offered express purchase, but it wasn’t really about control of their time, whether it’s online or in the store,” Heydon said.

The program is not only aimed at younger consumers but those living in urban areas who may pay higher insurance premiums. The initial pilot, which is available for the 2019 UX Crossover model, will debut in Chicago, Boston, Los Angeles, and Miami. At the conference, it was also noted that the subscription-like model would include telematic services, such as hands-free calling and GPS.

Toyota declined to reveal the monthly payment amount for the program, how long the pilot program would operate, or which insurance provider the service would bundle with.

“We’re piloting a number of ideas for the purposes of testing and learning,” said Sabreen Dhillon, TFS senior manager of relationship marketing. “Typically, you have the traditional retail and lease products, and now it’s really about trying to get an understanding of what customers want, what they need, and what their actual behaviors are.”

Source link

Turn Your Bulk Auto Notes Into Cash

LAS VEGAS — Hyundai Capital America, which has $2 billion of dealer floorplan loans outstanding, is looking to double that business, HCA President and Chief Executive Ross Williams said during the 18^th Annual Auto Finance Summit today.

“Not by next year, it will likely take a few years to reach that goal,” he said. In addition to doubling the size of its floorplan business, HCA aims to boost its internal efficiencies by reducing employee headcount and looking for opportunities to outsource functions.

As for top priorities going forward, Williams said: “I want a healthy portfolio, I want to support the Genesis brand. And [I want to] become more efficient.”

The three main initiatives include recapitalizing the business by increasing the portion of equity relative to debt, shifting incremental funding from secured debt to unsecured debt, and bolstering the captive’s overall liquidity profile.

Williams said HCA is also keeping an eye on changing market conditions and on innovation, such as subscription services. He also looks to certified preowned business as an opportunity in 2019. 

Source link

Turn Your Bulk Auto Notes Into Cash

LAS VEGAS — Dealerships can increase customer loyalty and profitability by tapping into the mobility-as-a-service model, according to Mike Furnari, chief business development officer at HyreCar, which provides a platform that matches ridesharing-service drivers with car owners who want to rent out their vehicles.

MaaS is the integration of various forms of transportation into an on-demand service that allows a person to complete a trip.  Furnari, speaking during a session on innovation at the 18^th Annual Auto Finance Summit, says dealerships are getting into MaaS “as a way to rent vehicles, pull from their rental fee, and potentially flip that customer into a car sell,” said Furnari.

Car dealerships, opposed to OEMs, have an advantage under this type of model because they offer a variety of vehicles and aren’t limited to particular brands.

Revenue, he said, could also be increased through servicing channels.

“The service department at a dealership absolutely loves a subscription for a car and ridesharing model because they have 100% customer retention,” Furnari said. “They know that customer is coming back to that service manager.”

The dispersed nationwide network of dealerships makes them ideal for MaaS, Furnari said, adding that dealers could see quick payouts from mobility services.

“Dealers have the most to gain in mobility future right now,” said Furnari. “Pick a car-sharing company, test it with one car, [and] dealers will start to see revenue within 24 hours.”

Source link

Turn Your Bulk Auto Notes Into Cash

© Can Stock Photo / focalpoint

LAS VEGAS — Shifting monetary policy, a tight labor market, and a host of other challenges threaten to disrupt the second-longest business expansion in U.S. history, said Robert Dye, senior vice president, and chief economist at Comerica Bank, in a session yesterday at the 18th Annual Auto Finance Summit.

The current business cycle has been in place for 112 months — since July 2019 — second only to the 120-month expansion period from 1991 to 2001.

One of the major question marks is auto sales, which have likely peaked, Dye said. “I get a little concerned when auto sales get below 16.5 million units on the back side of a cycle because that tends to be the vulnerable zone where they can slide really quickly,” he said. “We’re not there yet, but as we get closer to that 16 [million]-to-16.5 [million] level, I get concerned.”

Meanwhile, lenders should keep their eye on the stock market. “The stock market is a great barometer of business sentiment,” Dye said. “But a stock market correction is potentially one of those tripwires going into the next recession.”

Another key factor: the intersection between the corporate debt markets and corporate profits. “Traditionally, late in the cycle is when corporate profits get squeezed and corporate debt markets start to lose some quality,” he said. “We could be on the verge of seeing both of those. If I see both those things deteriorating — in terms of profit spreads narrowing and [the quality of the] debt market deteriorating at the same time — I start to get worried.”

Source link

Turn Your Bulk Auto Notes Into Cash

Renee Franck, SunTrust Dealer Finance’s national credit manager, shared with a large crowd of female professionals attending the inaugural Women in Auto Finance Luncheon on Tuesday the key lessons she learned in a career that spanned more than three decades.

A lot has changed in that time.

“When you went to meetings back then, you would be either the only woman in the room or one of very few,” Franck said at the luncheon, which was held during the 18^thAnnual Auto Finance Summit. “It’s a male-dominated world, and we’ve grown, but we have a long way to go.”

Franck began her auto career in 1987 when she left a clerical banking job to work at Bill Talley Ford in sales and dealer finance. Today, she is the first women to hold the title of National Credit Manager in the SunTrust finance unit.

As her career progressed, she learned how to take chances, how to use her individual skills and abilities and how to be a transparent leader.

“These three things … have followed me throughout my career, do not be afraid to take a risk,” Franck said. “When I told my family I was going to step out of that safe clerical position at the bank and go sell cars, they thought I had lost my mind.”

But Franck didn’t think of it that way, she saw an opportunity to excel in a space women did not traditionally occupy.

“There was nothing like selling a truck to a guy and telling him what gross weight he needed to tow and all those kinds of things, it psyched them out,” she said.

But going against the grain did not always come naturally to Franck.

“When I first started in the car business I tried to fit into the man’s world and not use the emotional side, to be tough. I found that was not natural for me,” she said.

Successes came when Franck felt she could be herself.

“I encourage you to not shy away,” she told the audience, “you’ll be more successful and true to yourself.”

A final point Frank made at the luncheon was the need for women to mentor others. A style she learned from her own mentor, SunTrust’s head of national indirect lending Charles “Chuck” Jones, is to communicate openly and transparently.

“Being honest, open and transparent will help you build a better team, a better department, a better business internal and external it builds a better model.”

Source link

Turn Your Bulk Auto Notes Into Cash

© Can Stock Photo / AndreyPopov

More than a dozen credit unions across the country were hit with a fake car loan scheme perpetrated by three conspirators found guilty last week.

The fraudulent acts were first revealed in March when the suspects were accused of obtaining $1 million in auto loans, according to court documents filed by federal prosecutors in U.S. District Court in Charlotte, N.C.

Kimberlie Flemings, Stanley Barron, and Brian Lyles submitted dozens of fraudulent auto and personal loan applications in their names and in the names of “at least 30 other individuals they had recruited to participate in the scheme,” announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.

The conspirators also created fake purchase orders, which were submitted to the financial institutions as part of the loan applications. The majority of the loans defaulted, which caused losses for the financial institutions involved.

After the fake auto loan applications were submitted, the conspirators created fake auto dealerships and pretended to be the sellers of the vehicles purchased with the fraudulent loans. Additionally, bank accounts, false websites, and addresses associated with the fake auto dealerships were created.

In an attempt to cover up the fraud, the conspirators made false statements to the defrauded banks and credit unions that attempted to collect on the debts, including a lie that tried to convince the financial institutions that borrowers had been the victims of identity theft and that they had not authorized the loans.

Though a sentencing date has not been set, each of the charges the defendant was convicted of carries a maximum sentence of 30 years in prison and a $1 million fine.

Listed are the credit unions involved:

• Navy FCU in Vienna, Va.
• Pentagon FCU in Tysons Corner, Va.
• State Employees CU in Raleigh, N.C.
• Aliant Federal Credit Union in Chicago
• Digital FCU in Marlborough, Mass.
• Patelco CU in Pleasanton, Calif.
• Affinity FCU in Basking Ridge, N.J.
• NASA FCU in Upper Marlboro, Md.
• Chartway FCU in Virginia Beach City, Va.
• USAlliance FCU in Rye, N.Y.
• McGraw-Hill FCU in East Windsor, N.J.
• Air Force FCU in San Antonio, Texas
• Garden Savings FCU in Parsippany, N.J.
• Credit Union of New Jersey in Ewing
• Atlantic FCU in Kenilworth, N.J.

Source link

Turn Your Bulk Auto Notes Into Cash