Who's Who Among Special Finance Companies (2016)
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Transcript of Who's Who Among Special Finance Companies (2016)
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DEALERSTRONGGreg GoebelPresident and CEO
Who’s Who Among Special Finance
Companies?
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Session OverviewWhich 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
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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.
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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.
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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
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Relationship of Sales Among Special Finance Tiers
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%
100.0%
SF Tier 1SF Tier 2SF Tier 3SF Tier 4Tier Zero
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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
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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 $17,683Miles 153 55,199
Amount Financed $30,344 $19,142
Total Down Pmnt $2,098 $1,721 Payment $492 $364Term 66 68
Veh. Gross Profit $1,203 $2,499
Total F&I Gross $2,256 $1,721
Total Gross Profit $3,459 $4,220
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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 $16,291Miles 131 55,394
Amount Financed $27,609 $17,318
Total Down Pmnt $2,086 $1,187Payment $502 $378Term 68 67
Veh. Gross Profit $1,538 $2,417
Total F&I Gross $2,030 $1,478
Total Gross Profit $3,112 $3,895
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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 $15,425Miles 194 57,152
Amount Financed $24,427 $16,142
Total Down Pmnt $2,681 $1,292Payment $476 $383Term 68 66
Veh. Gross Profit $937 $2,355
Total F&I Gross $1,799 $1,211
Total Gross Profit $2,735 $3,566
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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 $412Wells Fargo Dealer Services 3.5% 552 $1,636 $17,976 $1,239 $1,350 $2,589 45,644 70 $375
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Finance Company Gross Profits
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 $500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
COAF Santander Ally Wells CAC Exeter CPS Chase
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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 $14,877Miles 175 59,873
Amount Financed $22,747 $15,463
Total Down Pmnt $2,317 $934Payment $463 $387Term 69 64
Veh. Gross Profit $1,034 $2,385
Total F&I Gross $1,645 $1,043
Total Gross Profit $2,679 $3,428
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SF Tier 3 Finance CompaniesFinance
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 $408Credit 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 $398Santander 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 $395Wells Fargo Dealer Services 4.0% 505 $1,909 $16,455 $1,526 $1,032 $2,559 57,035 66 $365
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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 $13,604Miles 67 68,783
Amount Financed $22,404 $13,938
Total Down Pmnt $2,317 $934Payment $459 $367Term 70 61
Veh. Gross Profit $876 $2,222
Total F&I Gross $1,760 $724
Total Gross Profit $2,637 $2,945
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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 $396Regional 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 $396Gateway 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
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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 $13,788Miles 71 63,784
Amount Financed $21,653 $14,070
Total Down Pmnt $2,317 $934Payment $459 $367Term 63 63
Veh. Gross Profit $915 $2,222
Total F&I Gross $1,760 $724
Total Gross Profit $2,474 $3,495
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No Score Finance CompaniesFinance
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 $347Ally Financial 5.8% $1,269 $15,389 $1,539 $1,346 $2,886 39,547 70 $321Wells Fargo Dealer Services 5.4% $1,620 $13,618 $1,579 $985 $2,564 56,736 66 $283Capital 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
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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 $385Tidewater 4.9% 475 $82 $17,778 $2,003 $628 $2,631 32,706 70 $453United Auto Credit 4.8% 472 $1,981 $13,109 $743 $0 $743 142,429 39 441First Investors 3.9% 444 $1,800 $18,209 $351 $1,877 $2,228 32,948 72 417
*% of Niche Tier
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Just Missing the CutFinance
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 $482Used 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 $405Gateway 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
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