By Tanya Ferrero
As many subprime customers face economic instability from the pandemic and economy, BHPH dealers must prepare for upcoming obstacles to maintain and grow their operations this year. Difficulties from last year continue to impact the labor force in 2022, including unemployment, underemployment, and illness. In addition, the recent halt in government assistance throughout the nation threatens BHPH dealers with defaults, late payments, and limited portfolio growth due to lack of capital. With these concerns and more, BHPH dealers must be prepared with the correct tools and resources to mitigate their risk.
COVID’s Continued Impact on Borrowers’ Ability to Pay
BHPH customers’ income instability due to COVID directly and reactions to COVID indirectly will continue to be a major concern for dealers. This year, the unemployment population reached 6.5 million as of January 2022 according to the U.S. Bureau of Labor Statistics1. Many subprime customers may not have jobs that allow them to work remotely, leaving them at the mercy of COVID regulations that could reduce hours or workforce. In the worst situations, these borrowers may be unable to work due to a COVID illness. As these subprime customers struggle to keep consistent employment, BHPH dealers may experience delayed payments or defaults.
Furthermore, the recent end to several government assistance programs across the nation brings liquidity challenges to BHPH borrowers. With the unlikelihood of a fourth set of stimulus checks this year and states like California and New York halting their unemployment benefits, borrowers will have less cash potentially to pay their loans. BHPH dealers need to be proactive in mitigating this risk.
GoldStar Offers Specialized Tools Proven to Help BHPH Dealers in 2022
The issues that BHPH dealers face in 2022 are the same issues that GoldStar was created to mitigate. With GoldStar, dealers can encourage prompt payments and protect their assets seamlessly. Specific features like audible payment reminders, starter interrupt, Recovery Link™, and vehicle abandonment alerts will remain key tools for BHPH dealerships as they prepare for upcoming obstacles.
Payment Reminders and Starter Interrupt: In these uncertain times with competing priorities, borrowers must be reminded to prioritize paying their loans. To this end, audible payment reminders and starter interrupt features prove to be effective. 74% of dealers have seen an increase in vehicle payments, and 84% have reported reduced delinquencies. With audible payment reminders, customers hear a buzzer that notifies them of their late payments, while the starter interrupt feature allows dealers to turn off the vehicle safely once it has reached a stop, forcing borrowers to make a payment before they can use the vehicle again.
Recovery Link: If borrowers become delinquent this year, dealers can streamline the recovery process by using GoldStar’s Recovery Link. With this feature, dealers can cut the time it takes to recover a vehicle and keep their assets protected by sending mobile friendly links or emails to repo agents. These links share real-time location and history for the vehicles being recovered. To keep BHPH dealers in control of their data, these links can be set to expire within 24 hours or up to 30 days. In addition, there is no additional data disclosed, ensuring privacy and security.
Vehicle Abandonment Alerts: Sometimes, borrowers will simply abandon a vehicle if they are not able to make their payments. With the supply chain crisis making it extremely difficult to acquire new vehicles for dealerships’ lots, vehicle abandonment can cause even more strain on growing dealers’ portfolios. Through GoldStar’s vehicle abandonment alerts, dealers will be notified when a vehicle has been inactive for over seven days, prompting the dealer to decide on recovering the vehicle and preventing the loss.
GoldStar is the #1 Trusted, Secured, Compliant GPS Telematics
BHPH dealers cannot control the pandemic or the economy, but they can control their business with GoldStar as their partner. As the #1 GPS solution provider in the nation, GoldStar gives dealerships dealer-driven technology designed to help them protect assets, collect payments, and recover vehicles. With the largest in-house installation network, BHPH dealers can ensure they are supported throughout the process. Bring GoldStar into your dealership this year; schedule a demo today.
1 U.S. Bureau of Labor Statistics: The Employment Situation – January 2022