who's who among special finance companies · 2014. nearly 2.25m transactions from over 800...
TRANSCRIPT
Who's Who Among Special
Finance Companies
What Companies Are Buying Which Customers?
Used Car University Copyright 2013 all rights reserved
DEALERSTRONG - Greg Goebel, CEO
Session Overview
Which companies dealers are using most often
Recap of each credit tier
Averages vs. Benchmarks
Source of our data
Recap of the finance companies performance in each tier
Data Sampling
Cooperative effort - DealerStrong and ProMax Unlimited
Merged transactional deal data beginning May 2014.
Nearly 2.25M transactions from over 800 dealers who report sales data tied to credit scores.
Data Sampling
Data was scrubbed many times to validate each transaction.
Averages and benchmark deal characteristics for each credit tier developed (including near-prime and prime).
Identify the most frequently and profitably financed vehicles.
DealerStrong’s
National Credit Tiers
681+
680 - 621
620 - 576
575-521
520 - 476
475 - 100
0
Prime Near Prime
Tier 1 Tier 2 Tier 3 Tier 4 No
Score
Special Finance
Relationship of Sales Among
Special Finance Tiers
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
SF Tier 1
SF Tier 2
SF Tier 3
SF Tier 4
Tier Zero
New vehicle gross profits exclude $730 in dealer incentives.
Prime 681+ • Most creditworthy
customers
• Lowest interest rates. Very extended terms
• New vehicle buyers – average 755 credit score
New* Used
% of Category 62.7% 34.3% Score 771 755
Sales Price $32,578 $20,419 Miles 303 48,436
Amount Financed $29,782 $20,602
Total Down Pmnt $5,640 $2,400 Payment $446 $347 Term 61 68
Veh. Gross Profit $1,355 $2,487
Total F&I Gross $1,553 $1,604
Total Gross Profit $2,908 $4,091 New vehicle gross profits exclude $730 in dealer incentives.
New vehicle gross profits exclude $730 in dealer incentives.
Near Prime
621 – 680 • Some finance
companies say they “act like prime buyers, except when it comes time to pay.”
• Decent to good credit.
• High D-T-I ratios.
• Highest average Total Deal Gross Profits
New* Used
% of Category 18.4% 20.1% Score 653 651
Sales Price $29,283 $17,683 Miles 153 55,199
Amount Financed $30,344 $19,142
Total Down Pmnt $2,098 $1,721 Payment $492 $364 Term 66 68
Veh. Gross Profit $1,203 $2,499
Total F&I Gross $2,256 $1,721
Total Gross Profit $3,459 $4,220 New vehicle gross profits exclude $730 in dealer incentives.
New vehicle gross profits exclude $730 in dealer incentives.
SF Tier 1:
620 – 576 • Cream of the ‘crap’.
• Deeper credit file.
• Good residence and job time.
• Good income. No major derogatory credit.
• Fees: $0 - $200
• Req. Cash Down: $0
New* Used
% of Category 8.3% 14.2% Score 600 599
Sales Price $26,405 $16,291 Miles 131 55,394
Amount Financed $27,609 $17,318
Total Down Pmnt $2,086 $1,187 Payment $502 $378 Term 68 67
Veh. Gross Profit $1,538 $2,417
Total F&I Gross $2,030 $1,478
Total Gross Profit $3,112 $3,895 New vehicle gross profits exclude $730 in dealer incentives.
New vehicle gross profits exclude $730 in dealer incentives.
SF Tier 2:
575 – 521 • Traditional subprime buyer.
• Stable employment & income.
• Higher loan-to-value ratio.
• Worse P-T-I ratio.
• Decent car credit.
• Stable in area & at job.
• Fees: $95 - $400
• Req. Cash Down: $0 - $500
New* Used
% of Category 5.6% 13.1% Score 552 550
Sales Price $24,230 $15,425 Miles 194 57,152
Amount Financed $24,427 $16,142
Total Down Pmnt $2,681 $1,292 Payment $476 $383 Term 68 66
Veh. Gross Profit $937 $2,355
Total F&I Gross $1,799 $1,211
Total Gross Profit $2,735 $3,566 New vehicle gross profits exclude $730 in dealer incentives.
SF Tier 2 Finance Companies
Finance
Company
% of
Tier
CB
Avg.
Cash
Down.
Sale
Price. FE Pft. F&I GP Total Pft
Avg
Miles Term. Paym.
Capital One 9.7% 552 $1,653 $16,371 $1,136 $1,544 $2,680 36,404 70 $397
GMF/Americredit 7.3% 553 $1,483 $21,808 $634 $1,253 $1,887 14,223 69 $420
Ally Financial 5.8% 552 $1,323 $17,485 $1,527 $1,625 $3,152 35,047 70 $384
Regional Acc 5.7% 547 $717 $16,208 $1,440 $1,137 $2,577 30,380 70 $425
Santander 5.5% 548 $1,452 $14,229 $387 $1,237 $1,624 36,799 70 $370
Credit Union 5.3% 550 $1,311 $14,832 $1,857 $1,062 $2,919 56,573 64 $332
Credit Accept. 5.3% 548 $1,646 $13,568 $1,272 $448 $1,721 62,941 62 $400
CPS 4.3% 548 $1,086 $16,204 $1,586 $859 $2,445 37,151 69 $412
Wells Fargo
Dealer Services 3.5% 552 $1,636 $17,976 $1,239 $1,350 $2,589 45,644 70 $375
Finance Company Gross Profits
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16
COAF Santander Ally Wells
CAC Exeter CPS Chase
New vehicle gross profits exclude $730 in dealer incentives.
SF Tier 3:
520 – 476 • Tier where you earn your
keep. • Shorter job time, gaps. • Verifiable but lower
income. • Some good credit – more
derog. • Likely prior repo or
foreclosure. • L-T-Vs 90% - 105% • P-T-I 12% - 15% • Fees: $500 - $1,000 • Req. Cash Down: $1,000
New* Used
% of Category 1.8% 6.2% Score 501 501
Sales Price $22,930 $14,877 Miles 175 59,873
Amount Financed $22,747 $15,463
Total Down Pmnt $2,317 $934 Payment $463 $387 Term 69 64
Veh. Gross Profit $1,034 $2,385
Total F&I Gross $1,645 $1,043
Total Gross Profit $2,679 $3,428 New vehicle gross profits exclude $730 in dealer incentives.
SF Tier 3 Finance Companies
Finance
Company
% of
Tier
CB
Avg.
Cash
Down.
Sale
Price. FE Pft. F&I GP Total Pft
Avg
Miles Term. Paym.
Credit Accept. 9.5% 498 $1,786 $13,102 $1,425 $416 $1,841 65,204 60 $391
Capital One 8.6% 504 $1,618 $15,967 $1,207 $1,320 $2,527 41,076 69 $393
CPS 7.8% 498 $1,344 $15,969 $1,285 $831 $2,116 41,246 68 $408
Credit Union 6.3% 500 $1,389 $15,376 $2,031 $839 $2,870 66,860 60 $348
Ally Financial 6.3% 503 $1,436 $18,219 $1,572 $1,587 $3,159 39,703 67 $398
Santander 5.6% 503 $2,620 $16,612 $898 $1,199 $2,098 40,197 70 $393
GMF/Americredit 5.4% 505 $1,495 $21,740 $1,072 $1,212 $2,284 27,246 69 $453
Regional Accept 5.0% 505 $1,001 $16,372 $1,707 $1,023 $2,730 34,516 69 $443
Prestige Finc. 4.7% 501 $689 $15,491 $1,778 $748 $2,526 48,921 70 $395
Wells Fargo
Dealer Services 4.0% 505 $1,909 $16,455 $1,526 $1,032 $2,559 57,035 66 $365
New vehicle gross profits exclude $730 in dealer incentives.
SF Tier 4:
475 – 100 • BIG difference New vs Used
• New: huge payments
• Used: BHPH “on steroids”
• High D-T-I and P-T-I ratios.
• Short job time, gaps & hard to prove income.
• Many exceptions (DL, stubs, repos)
• Fees: $1,500 - $3,000
• Req. Cash Down: $1,500 - $3,000
New* Used
% of Category .5% 2.7% Score 501 501
Sales Price $22,854 $13,604 Miles 67 68,783
Amount Financed $22,404 $13,938
Total Down Pmnt $2,317 $934 Payment $459 $367 Term 70 61
Veh. Gross Profit $876 $2,222
Total F&I Gross $1,760 $724
Total Gross Profit $2,637 $2,945 New vehicle gross profits exclude $730 in dealer incentives.
SF Tier 4 Finance Companies
Finance
Company
% of
Tier
CB
Avg.
Cash
Down.
Sale
Price. FE Pft. F&I GP Total Pft
Avg
Miles Term. Paym.
CPS 11.7% 455 $1,472 $15,788 $2,052 $736 $2,788 42,369 68 $397
Credit Accept. 9.6% 453 $1,993 $12,032 $1,228 $466 $1,694 72,992 58 $363
Santander 8.1% 447 $3,333 $16,236 $325 $1,224 $1,549 43,701 69 $396
Regional Accept. 7.2% 456 $703 $16,151 $964 $1,415 $2,379 32,489 68 $453
Prestige Finc. 6.6% 449 $1,073 $14,981 $1,596 $744 $2,341 44,184 68 $396
Gateway Finc. 5.5% 454 $720 $10,378 $1,374 $118 $1,492 118,275 57 $298
Capital One 5.1% 455 $1,073 $17,715 $884 $1,675 $2,558 39,830 69 $451
Credit Union 4.7% 450 $1,320 $13,395 $1,892 $781 $2,674 78,618 55 $288
Ally Financial 4.5% 458 $1,525 $17,658 $1,627 $1,450 $3,077 39504 69 $334
New vehicle gross profits exclude $730 in dealer incentives.
No Credit Score • Can be credit “ghost” or
credit criminal
• Affordability (P-T-I)
w/shorter term is key.
• Significant equity
• In some states, non-documented aliens.
• Tier grew by 20%+ in 2015!
• Fees: 10% - $2,500
• Req. Cash Down: Used: Minimum 10%
New* Used
% of Category 2.7% 9.4% Score No Score No Score
Sales Price $23,674 $13,788 Miles 71 63,784
Amount Financed $21,653 $14,070
Total Down Pmnt $2,317 $934 Payment $459 $367 Term 63 63
Veh. Gross Profit $915 $2,222
Total F&I Gross $1,760 $724
Total Gross Profit $2,474 $3,495 New vehicle gross profits exclude $730 in dealer incentives.
No Score Finance Companies
Finance
Company
% of
Tier
CB
Avg.
Cash
Down.
Sale
Price. FE Pft. F&I GP Total Pft
Avg
Miles Term. Paym.
Credit Union 8.9% $1,746 $13,274 $1,603 $1,284 $2,887 54,248 63 $285
Santander 7.2% $1,607 $14,907 $(170) $1,487 $1,317 26,809 70 $375
Credit Accept. 7.2% $1,510 $11,591 $1,471 $547 $2,018 75,844 59 $347
Ally Financial 5.8% $1,269 $15,389 $1,539 $1,346 $2,886 39,547 70 $321
Wells Fargo
Dealer Services 5.4% $1,620 $13,618 $1,579 $985 $2,564 56,736 66 $283
Capital One 4.9% $1,385 $15,729 $1,377 $1,513 $2,890 39,969 70 $363
CPS 4.8% $1,490 $15,615 $1,795 $781 $2,576 45,554 67 $385
Regional Accept 3.7% $833 $14,762 $1,227 $1,184 $2,411 29,624 70 $391
Ford Motor Credit 2.7% $2,086 $23,453 $1,075 $974 $2,049 10,144 49 310
Exeter Finance 2.5% $1,863 $15,465 $609 $683 $1,291 38,172 69 $406
*
Open Chapter 7
Finance Companies
Finance
Company
% of
Tier*
CB
Avg.
Cash
Down.
Sale
Price. FE Pft. F&I GP Total Pft
Avg
Miles Term. Paym.
CPS 37.1% 482 $1,416 $15,697 $1,641 $808 $2,449 39,434 69 $396
Prestige Finc. 23.5% 486 $671 $14,971 $1,669 $727 $2,397 47,333 69 $391
Credit Accept. 8.8% 482 $1,850 $12,968 $1,392 $428 $1,819 63,573 61 $385
Tidewater 4.9% 475 $82 $17,778 $2,003 $628 $2,631 32,706 70 $453
United Auto
Credit 4.8% 472 $1,981 $13,109 $743 $0 $743 142,429 39 441
First Investors 3.9% 444 $1,800 $18,209 $351 $1,877 $2,228 32,948 72 417
*% of Niche Tier
Just Missing the Cut Finance
Company
% of
Tier
CB
Avg.
Cash
Down.
Sale
Price. FE Pft. F&I GP Total Pft
Avg
Miles Term. Paym.
New Vehicles
JP Morgan Chase 3.3% 364 $4,526 $25,652 $(76) $2,191 $2,115 144 68 $466
Exeter Finance 2.4% 406 $1,214 $24,415 $(593) $755 $161 6 72 $578
Flagship 2.3% 461 $1,209 $21,773 $94 $1,682 $1,776 24 72 $482
Used Vehicles
Flagship Credit 2.2% 432 $1,224 $14,635 $1,310 $1,798 $3,108 40,613 71 $383
Exeter Finance 2.2% 345 $1,720 $15,247 $1,019 $678 $1,696 41,534 69 $405
Gateway Finc. 2.1% 322 $788 $10,957 $1,676 $188 $1,864 107,172 58 $314
JP Morgan Chase 4.8% 381 $1,656 $16,012 $1,162 $1,014 $2,176 68,450 62 $373
Skopos Finc. 1.3% 325 $1,657 $14,661 $777 $547 $1,324 48,048 70 377
Westlake Finc. 1.3% 203 $2,519 $13,123 $759 $730 $1,490 75,853 51 401
For More Detailed Information:
Thank you for your participation! Keep an eye out for an email detailing where to download the updated charts following the conference.
www.DealerStrong.com
Greg Goebel, [email protected]
877-811-8107