With tax season comes a wave of car buyers flooding dealerships with a nice chunk of change in hand as their down payment. Around 20% of these consumers are also subprime, and dealerships must decide if approving them for a loan is worth the risk. And it can be with the help of GPS vehicle tracking.
Now, according to an article from SubPrime Auto Finance News, the Equifax National Consumer Credit Trends Report shows that just 2.06% of subprime auto buyers are severely delinquent in making their payments. At first glance, this doesn’t appear to be a cause for alarm. In fact, if you flip the numbers around, it shows that 97.94% of these consumers are doing a relatively good job of paying their loans.
Small Percentage, but BIG Impact
As a dealer, you might call these great odds and go ahead with approving subprime buyers. We agree that this all make sense. But, let’s dig a little deeper. According to the report, between January and November 2015, 5.8 million loans were originated to consumers with a credit score below 620 and add up to a whopping $104.2 billion balance.
If that 2.06% of subprime buyers that are already severely delinquent completely stop paying, you’re looking at a loss of $2,142,400,000. Yes, that’s over $2 Billion.
While this massive amount certainly wouldn’t be taken on by a single dealership, it goes to show that losses, even on a small percentage of subprime buyers, can really add up. Especially for BHPH dealers! So what’s a dealer to do?
Bridge the $2B gap with GPS Tracking
Sure, 97.94% of subprime buyers will make good on their auto loans. They may have had an unexpected medical expense derail their perfect credit, or perhaps, they were laid off from a great paying job. Even a number those who aren’t great at managing their money make paying for their vehicle a priority so they can drive their kids to school and get to work.
The solution is protecting your assets. Yes, approve subprime buyers. Yes, trust that 97.94% of them will make every last payment on time. Just don’t put your dealership at risk. A GPS vehicle tracking solution is a great way to protect your bottom line by bridging the 2.06% gap.
7 Quick Things to look for in GPS Tracking
Of course, don’t go with just any GPS tracking provider. Here are 7 quick things to look for:
- A trusted, proven provider with years of history and innovation under their belt.
- Rigorous privacy controls that keep your customer data safe and you in compliance.
- Powerful software that allows you to easily track and locate vehicles for recovery.
- An intuitive user interface that lets you to track, manage and get on with your day.
- A provider that listens to its dealers, adding new features according to their needs.
- Reports and alerts that can be easily customized to fit how you run your dealership.
- A national network of GPS experts who can install at your location in 24-48 hours.
For well over a decade, Spireon’s GoldStar GPS tracking solution has fulfilled this list and beyond. We put our dealers first and go the extra mile to help them say yes to more customers while reducing their risk. There’s a reason why over 2.5 million subscribers trust Spireon. Find out for yourself by getting in touch with our team today to learn more about protecting your bottom line.