The Industry's Leading Source For F&I, Sales And Technology

Article

Financing the Hispanic Market

March 2007, F&I and Showroom - Feature

by Luis Gil and Bob Blackburn

In today’s special finance market, the Hispanic market is one of considerable size and importance to the automotive industry. Those who have dealt with this market know there are two distinct segments that need to be addressed separately. There are those with documentation and those without. Those in the country with permanent documentation (i.e. VISA, citizenship) do not face the same hurdles as those who migrated to the United States and obtained a tax identification number (TIN) — also known by its IRS Form number, the W-7. The IRS issues TIN numbers to individuals who cannot obtain a Social Security number from the federal government because of visa issues.

PriceWaterhouse, in its White Paper dated August 2005, estimated the Hispanic buying power at $686 billion in 2004, and predicted it to grow at a compounded annual rate of 8.2 percent. The Hispanic population is also the fastest-growing population and has the fastest income growth of any segment in the United States. According to Census Bureau data from 2005, the Hispanic population has grown 3.6 percent annually the previously 10 years, outpacing the growth of the general population by more than three to one. The current population of this consumer group stands at approximately 42.8 million, making this market too large to overlook.

True to Their Word

Many U.S. banks and financial institutions have become wise to the benefits of this market. The Hispanic customer offers a substantial source of revenue for lending institutions, as this group generally makes its payments on time. In many cases, this group will also pay off its accounts early — a fact born out of the high interest rates most Latin American countries impose on their consumer base. This has led to a cultural fear of interest rates. In many cases, Hispanic customers will bring their vehicle back to the dealership if they cannot continue making payments on their auto loans. Lenders like this because it eliminates the need for costly repossession specialists.

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  

Blog

So Here's the Deal

Ronald J. Reahard
Addressing F&I’s Internet Problem

By Ronald J. Reahard
A frustrated F&I manager poses an increasingly common question: How do you sell protection products to customers who demand the final price by phone and then show up with a bank check?

(Video) Selling Eight Products Without Losing the Customer

By Ronald J. Reahard
Is offering eight products a bad idea? The magazine’s resident F&I pro says it depends on the producer and the presentation.

He Had a Goal: Remembering David Ressler

By Ronald J. Reahard

[Video] Selling to Short-Term Owners

By Ronald J. Reahard

Done Deal

Gregory Arroyo
Change Is Happening

By Gregory Arroyo
Saddened by the potential loss of another piece of his childhood, the editor tries to put the pieces together when he realizes there’s a good lesson to be learned in a toy retailer’s likely demise.

Who Will Take Up the CFPB's Torch?

By Gregory Arroyo
The CFPB’s acting director tells state regulators there will no longer be ‘regulation by enforcement,” but the editor believes there’s a long list of regulators waiting to take up the torch.

Military Lending Act Guidance: The Gift That Keeps On Giving

By Gregory Arroyo

Resolution Needed

By Gregory Arroyo

Mad Marv

Marv Eleazer
Overcome Your F&I Weaknesses

By Marv Eleazer
His Madness issues a challenge to every F&I professional: Eradicate your bad work habits, diversify your lender spread, and check your God complex at the door.

Proper Deal Structure Moves Mountains

By Marv Eleazer
His Madness has a simple but powerful piece of advice for newbie F&I managers and those struggling to adapt to the way finance sources are rating credit-challenged car buyers.

Show Us Some Love

By Marv Eleazer

Chargeback Prevention

By Marv Eleazer

On the Point

Jim Ziegler
Sharpen Your Survival Skills

By Jim Ziegler
‘Da Man’ has a plan you can use to survive the collapse of the car business and remain profitable through the dealer apocalypse.

Sales Rock Stars Still Exist

By Jim Ziegler
Da Man says $40,000-a-month sales rock stars still exist. He says you’ll find them on YouTube and Facebook Live.

The New Stooges

By Jim Ziegler

Is Your Quick Lube Driving Away Business?

By Jim Ziegler