3 Ways to Protect your Profits
1. Better Underwriting PracticesIt’s almost quite hard to believe that there are still many auto loan deals being made to customers with 0 credit – an extremely risky deal to make. Ensure that you are going through deals with tighter applications and verifications when you encounter a high-risk customer.Automatic STIPS verification can make your life easier and get you your car buyer’s basic employment and housing verification (We offer this with our solutions by the way!).However, it’s always recommended to ask even more questions about a car buyer’s ability to make their monthly car payment. You should always take into account how much of the car buyer’s after-tax income is leftover after deducing the costs of food, housing or utilities.
2. Thorough Payment CoachingMany subprime loan borrowers are just bad payers that need some more coaching to become better on-time payers. Aside from calling them directly to ask for payments, you may want to consider other non-invasive payment reminder options through email or text notifications. You may even use devices installed in the car to remind borrowers of when payment is due before, on, or right after payment.
3. Secured Profits with GPS TrackingThere’s a good reason why some lenders offer lower loan interest rates on loan interest rates if low-credit car buyers agree to have GPS devices installed in their cars. In order to prevent a large potential loss, having the option of immediate vehicle location and near-immediate recovery or repossession is important.Additionally, one study found that 1 in 8 used car dealers in California have sold one vehicle at least three times. Imagine having to undertake the task of locating a car several times without a sound GPS tracking system in place the first time around.
How Spireon can HelpThere is real value in adopting GPS vehicle tracking software for your lending business or car dealership. Based on our customers’ feedback, we’ve found that:
- 84% of report reduced delinquencies after installing GPS vehicle tracking
- 78% have been able to finance customers with lower credit
- 68% have been able to finance customers with smaller down payments