F&I and Showroom, July 2017

www fi magazine com 8 F I and Showroom July 2017 DEVELOPMENTS F I product provider EFG Companies rolled out a new virtual F I model aimed at powersports and independent dealers but the executive overseeing the new offering said there are plenty of scenarios that would make the service a perfect fit for a franchised dealer Simplicity Finance and Insurance provides dealers with the equipment training and access to veteran F I producers who are trained in compliance and who handle deals virtually from EFGs Irving Texas headquarters Results from the companys pilot at an independent store during the first three months of the year put the services per copy average at more than 1000 A dealer who does 100 units a month they can afford to support an F I process with a deep bench of expertise said Mark Rappaport president of EFGs new Simplicity Division If theyre doing somewhere around 80 or fewer deals a month they have a difficult time finding people and keeping people So were basically a solution to help them sell more effectively in a compliant manner and improve back end profitability Rappaport said he has received inquiries from franchised dealers interested in directing subprime deals to the program while maintaining their in house F I team for all other deals The executive said he can also see the program working for dealers who offer offsite deliveries The only requirement would be wet ink signatures on the retail installment sale contract power of attorney and credit apps The virtual process kicks off the moment the first pencil is completed and the credit application is submitted The salesperson walks the customer into a room where a 40 inch display streams one of EFGs Simplicity F I producers They structure the deal put together the F I product presentation and make the pitch all recorded to ensure compliance Rappaport likened the experience to a Face Time conversation with all documents signed onscreen And when the deal is funded its funded directly to the dealer We provide all the equipment as part of the process all the training and then we take 50 of the backend Rappaport noted If no product is sold we dont take anything Simplicitys virtual F I producers are currently available Tuesday through Saturday reflecting the schedule on which powersports dealers operate The company was in the process of adding Monday to that schedule to reflect hours of operation for independent dealers Dealers who have seen this in action are most excited about the ability to use decades of experience giving them the best opportunity to close all customer types and maximize their back end profit Rappaport said They are also extremely interested in how Simplicity Finance and Insurance can enable them to better develop their inventory and lender mix for a great opportunity for back end product sales EFG Companies Launches Virtual F I Service CUDL SUBPRIME PULLBACK OPENS DOOR FOR CREDIT UNIONS With banks retreating from all risk tiers the auto finance market is primed for credit unions to increase their share by broadening their risk spectrum That was executive Michael Cochrums message to credit unions during CU Direct Lending CUDL s June 1 webcast to discuss first quarter finance trends The suggestion has been made that the banks are lowering their volume because theyre giving up or theyre walking away from subprime said Cochrum who serves as the technology firms vice president of analytics and advisory services It does appear that they are tightening up across all the spectrums which gives us again a good opportunity to take that market share in an area where we are very strong Finance sources across the board retreated from the subprime segment with even credit unions registering a sharp increase in auto loans extended to prime borrowers The result however was narrow margins which Cochrum suggested could be rectified if credit unions were to delve more downstream into the high risk tiers Im not suggesting that every credit union go out and buy deep and do subprime lending Cochrum said What I am saying is that in order for us to get greater margins on our portfolios especially as interest rates begin to rise we need to look at broadening our risk spectrum Credit unions on the CUDL platform maintained their No 2 position on Experian Automotives national rankings of auto finance sources with the segment originating 263778 auto loans during the first quarter That was 1403 originations short of Capital One Auto Finance which landed in the No 1 spot during the period