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Industry on the Rebound

April 2010, F&I and Showroom - Feature

by Tony Dupaquier

(Left to right) Thomas Wolfe, president and CEO of Wachovia Dealer Financial Services, John Noone, president of global marketing and sales at Ford Motor Credit Company, and Stephen Lambert, president and CEO of Nissan Motor Acceptance Corp., discuss the state of the auto finance industry during the CEO panel at AFSA’s 14th Annual Vehicle Finance Conference.

In February, major players in the auto finance business gathered for the American Financial Services Association’s 14th Annual Vehicle Finance Conference and Exposition, held before the annual dealer conference in Orlando, Fla. If you’re curious as to the overall tone of the conference, consider the following sound bites:

One speaker described last year as “the worst since the ’30s,” but completed his thought by saying the worst is behind us.

Another speaker confirmed what many dealers already knew when he said, “We were scared last year.”

A third speaker, representing a major captive lender, said what dealers have been waiting to hear: “We have to keep loaning out money. We affect 10 percent of the U.S. economy.”

A fourth speaker added, “We hit bottom in 2009 at 10.4 million vehicles and it is estimated the U.S. auto industry will sell approximately 11.9 million in 2010.”

The message was clear: Things are getting better. What that improved outlook means for automotive retailers and, more specifically, business offices across the country, remains to be seen. Whatever you conclude, having more lenders in the game can only mean more vehicles delivered and more revenue for the business office and the dealership as a whole.

Lenders Ready to Rebuild

One of the reasons lenders were in a better mood is the stabilization of delinquencies and repossessions. And while many finance sources intend to move forward cautiously, they still believe in the importance of building solid relationships with dealers and their business managers. The difference this time around will be an increased emphasis on building trust.

If you haven’t noticed, it now takes longer to secure an approval or a conditional approval. In many instances, lenders are verifying information prior to sending a callback. That’s why it’s crucial going forward that F&I managers are sure the information they provide lenders — including income, job and time at residence — is accurate. You might even want to take this a step further by providing lenders with the name and direct phone number of the person who can verify your customer’s job and income information.

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