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1122118 IL Happy Thanksgiving!_WP_600x473

Where to find the most-responsible shopper behaviors – Edmunds

Few car shoppers are average.

But averages taken from a survey of 842,000 vehicle transactions by automotive information website Edmunds.com are at least interesting from a dealership standpoint.

Because those averages deal with responsible behavior by car shoppers.

Edmunds.com based the conclusions in its state-by-state ranking of responsible car-shopping behavior on averages for four major factors: Trade-in with negative equity – under water, upside down – the dollar amount of negative equity, financing term and interest rate (APR).

110717 IL Personal touch important, even though car shoppers want digital optionsThe survey results suggested that shoppers in the Northeast and Great Lakes regions show the highest levels of responsible car shopping, while states mainly in the South and Southwest show the least-responsible behavior, based on a study by Edmunds.com.

The automotive information website found that Connecticut, Massachusetts and Rhode Island “lead the country in responsible car-shopping behavior” looking at transactions from May through September. Shoppers in New Mexico ranked last in responsible behavior, according to Edmunds.

Combining scores in all four categories, the Edmunds state-by-state rankings showed the following:

Most-responsible shoppers

  1. Connecticut
  2. Massachusetts
  3. Rhode Island
  4. Michigan
  5. New Jersey
  6. Pennsylvania
  7. Wisconsin
  8. New York
  9. Hawaii
  10. Maine

Least-responsible shoppers

  1. New Mexico
  2. Arkansas
  3. Alaska
  4. Mississippi
  5. Oklahoma
  6. Arizona
  7. Florida
  8. Texas
  9. Georgia
  10. Wyoming

Edmunds’ map of responsible shopping behavior by state shows where other states fall on a scale from Most Responsible (1-17) to Responsible (18-34) to Least Responsible (35-50).

Here is a summary of detailed results for each factor Edmunds considered in the rankings:

Trade-in with negative equity

Connecticut (10 percent), Massachusetts and Rhode Island (11 percent), and New Jersey (12 percent) shoppers are most responsible on average based on the low percentage of trade-ins under water, with negative equity ranging up to 33 percent in Arkansas and 32 percent in New Mexico.

Negative equity amount

Shoppers in Connecticut ($4,499), Massachusetts ($4,686) and Rhode Island ($4,694) also had trade-ins with the lowest dollar amount of negative equity, with Wisconsin ($4,724) and Pennsylvania ($4,799) also coming in below $5,000. The highest amount of negative equity was for trade-ins in Alaska ($6,852).

Length of financing

Car shoppers in Connecticut (64.2 months), Massachusetts (64.9 months), New York (65.6 months) and New Jersey (65.9 months) financed their vehicles for the shortest terms on average. The longest financing terms were found in Alaska at 74.6 months and New Mexico at 72.4 months.

Average interest rate (APR)

Only borrowers in Connecticut scored an average APR under 4 percent at 3.97 percent, while borrowers in Georgia (7.65 percent), Mississippi (7.2 percent) and New Mexico (7.06 percent) were paying the highest average APR, according to Edmunds’ data.

Opportunities remain as clock ticks toward end of 2018

The clock is ticking.

Just over six weeks remain in the 2018 sales year.

Dealers know full well that these typically are among the most important weeks of the year – including Thanksgiving weekend and the end-of-the-year holidays.

111318 IL Opportunities remain as clock ticks toward end of 2018

December itself has been the largest sales month of the year for three consecutive years.

“The last 60 days of the year are a major focus for our dealership,” reported Greg McLean, finance director at Toyota of North Miami, FL. “We find this push creates momentum that we carry into the next year to assure we start the new year at full throttle.”

The industry rolled into November with total sales around 14.6 million, about the same pace as 2017, so it appears 2018 will be the fourth consecutive year of more than 17 million in sales. Last year finished at about 17.55 million, according to the U.S. Bureau of Economic Analysis (BEA).

Expectations among industry analysts are that this year’s sales ultimately will fall just short of 2017. Still, that’s higher than most forecast – under 17 million – when the year started.

“I am expecting to finish strong to make up for the last few months that have been flat,” said Jose Garcia, used car lead finance manager at Lake Park Toyota in Florida. Headwinds are stiff, though, including higher interest rates and higher average car prices.

Meanwhile, at least some dealers who work with Santander Consumer USA are primed for end-of-year sales opportunities:

  • “The last two months of the year are so vital to our overall success that we have scheduled two big sales,” said Bob Miller, general manager at Tomlinson Motor Company in Gainesville, FL.
  • “Historically, the fourth quarter … [is] more productive than any other time,” said Roger Myton, new car sales manager at Palm Beach Toyota in Florida.
  • “History has shown us that we have to commit to advertising and sales events in November and December, in particular, to keep our traffic count up,” said Nikolas Dial, finance manager at The Car Company Suzuki in Warsaw and Goshen, IN. “So that’s exactly what we plan on doing.”

So, although the clock is ticking down to the end of 2018, there’s still time to finish the year strong, and the Santander Consumer USA sales team is all about helping your dealership meet its goals.

Contact your Dealer Relationship Manager for details on how SC can help.

Running the option is a smart way to score more customers

The Dealer Extranet.

It’s the play call that can help you score more deals with Santander Consumer USA (SC).

Featuring competitive advantages such as the Rehash Tool, which provides the quickest possible turnaround time on new deal options, and a customized dashboard that offers daily stats, notifications and reports on your deals with SC, it should be part of your everyday game plan.

“One of our greatest assets is our Dealer Extranet, especially for high-volume dealers,” said Stephen Rivelli, an SC Dealer Relationship Manager (DRM) in New York.

110618 IL Running the option is a smart way to score more customers“The ease of use and the multi-functionality of it, from rehashing an application to funding, allows my dealers a fast, user-friendly experience from application to funded. I stress the importance and use of the Extranet with all my dealers … [and] they usually see the light.”

In fact, thousands of dealership sales associates already have recognized the value of the Extranet and use it to maximize their results with SC and to manage their businesses better.

The Extranet is the next best thing to having your buyer on the line. You have real-time access to information and systems that can get things done.  If logging in to the Dealer Extranet is not a part of your regular routine, you could be missing out.

 

 

Here are five of the top uses of the Dealer Extranet:

  1. Rehash Tool – If you need to update the numbers or revise the type of vehicle being purchased, plug your new information into the Rehash Tool and receive a new structure in real time.
  2. Track deals in Funding – The Extranet will allow you to check the status of your deals in Funding and see if you need any additional documentation to complete your deals.
  3. Upload stips – This is a lot faster and easier with the Dealer Extranet. You bypass the hassle of faxing, and the stips go directly to the funder’s queue.
  4. Print a purchase letter – Get a breakdown of the total funded amount for your deal. The purchase letter shows all applicable fees, participation and discounts.
  5. Access the Dealer Resources – This section is a one-stop area for important documents. Just about any document a dealer needs to do business with SC can be found on the Extranet.

You can make the Extranet an integral part of your dealership’s routine by asking your DRM to set up a new user login – or logins for multiple users at your store. Your DRM also can help you discover the many features the Extranet provides your activated account.

Your DRM also is available to answer any questions that might arise or to reset your password.

When you’re set up on the Dealer Extranet, you can log in here and use it whenever you want. And put the power of the Dealer Extranet in your competitive playbook.

What you need to know about fraud risk and ‘Driving a New Model’

Fraudsters never rest.

And they may be headed to your dealership.

But Santander Consumer USA (SC) is committed to providing the information you need to fight back.

Our series, Driving a New Model, should help dealers spot the red flags for identity fraud, application misrepresentation, straw buyers and elder abuse, and includes actionable checklists.

“Awareness of fraud and elder-abuse red flags will allow you to take steps to reduce these risks and will result in a number of benefits,” says the SC pamphlet, Driving a New Model | A dealer guide to recognizing the warning signs of fraud, identifying suspicious buyers and taking action to reduce costs.

Driving a New Model suggests those benefits could comprise:

091818 IL What you need to know about fraud risk – and why you should care_V4

  • Improvement in the overall customer experience
  • Reduction in consumer harm and risk to the dealer’s reputation
  • Reduction in credit stipulations on an application
  • Reduction in funding delays to dealership
  • Reduction in post-funding disputes and potential unwinds

“Establishing a partnership with lenders is the best way to fight fraud,” wrote Frank McKenna of PointPredictive consulting firm in a separate Digital Dealer Magazine report 5 Reasons Car Dealers Should Be Concerned with Fraud. “Since lenders have more tools to diagnose and detect fraud, they can help you understand the impact to you before it ever happens.”

“Good collaboration on fraud is the key to winning the war on fraud,” according to McKenna.

And, as far as SC is concerned, “We actively seek your feedback and your insights into trends and concerns related to the risk of fraud or elder abuse,” says Driving a New Model.

Here are the five parts of our series:

Part 1: What you need to know about fraud risk – and why you should care

Part 2: Identity fraud can take ‘enormous toll’ on your dealership profits

Part 3: How to change the odds in your favor against application fraud

Part 4: What straw buyer fraud could mean to your dealership and how to avoid it

Part 5: How to recognize elder abuse if your dealership is targeted

But the fight against all types of vehicle-purchase fraud doesn’t end at the dealership door.

If you notice unusual behavior or information by applicants, please contact your SC Dealer Relationship Manager who can direct these concerns to the appropriate team to review.

Fraudsters never rest, and neither should you.

Together we can stop fraud.

Paul Clark Volkswagen

122 Liberty St.

Brockton, MA

Dealer principal: Paul Clark

General manager: Michael Girard

Brand represented: Volkswagen

How long in business: 72 years (third generation)

No. of employees: 25

Annual unit volume (approximate): 500

SC Dealer Relationship Manager: Joshua Busa

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DRM comment on what makes dealership special:

Paul Clark VW is a family-owned and run dealer that promotes an atmosphere of acceptance and help for all applicants across the spectrum. Customers are treated as equally important here no matter what their situation may be.

Mr. Clark has allowed his finance director, Michael Tishman, to work with the banks that he feels fit his customers’ needs best, and Santander Consumer has taken the role as his No. 1 non-prime bank.

Michael has taken the time to learn our program in and out and, as such, has consistently pieced deals together with us week after week despite the Volkswagen brand not being one of more high-volume vehicle lines. As a DRM, I always feel welcome at this store, and consider my visits there productive and valuable on both a personal and professional level.

How long working with Santander Consumer USA: Six years

What do you like about doing business with Santander Consumer USA:

We at Paul Clark Volkswagen enjoy the speed and efficiency that Santander Consumer USA operates at every day. Everyone we speak to is knowledgeable and hard working. Because of the professionalism of Santander Consumer USA our deals close the first time, and that helps with our cash flow and increases our ability to grow our business. Santander Consumer USA is our best bank – bar none!

One best practice that contributes to your dealership’s success:

One best practice that contributes to our success is [Santander Consumer USA’s] rehash tool. The rehash tool allows us to “discuss” deals without the typical phone calls and “phone tag” delays. We can make adjustments and get qualified customers into vehicles more efficiently.

Describe your experience with Santander Consumer USA:

We would like to spotlight your RoadLoans program. RoadLoans provides to us additional qualified approvals that we never would have received through our traditional resources. These extra deals can make a mediocre month into a good month.

We enjoy our relationship with Santander Consumer USA. From Joshua Busa, our Dealer Relationship Manager, to everyone that gets our deals approved and funded, we truly feel like partners. Thank you!

– Michael Tishman, Finance Director

Paul Clark, President

How to recognize elder abuse if your dealership is targeted

It sounds awful, because it is.

The illegal, unauthorized or improper use of an older individual’s resources by a caregiver or other person in a trusting relationship for the benefit of someone other than the older individual.

“This includes, but is not limited to, depriving an older person of rightful access to, information about, or use of, personal benefits, resources, belongings or assets,” according to the Enterprise Fraud Management (EFM) team at Santander Consumer USA (SC).

Examples include forgery, misuse or theft of money or possessions; use of coercion or deception to surrender finances or property, or improper use of guardianship or power of attorney.

091818 IL What you need to know about fraud risk – and why you should care_V4Nationwide, seniors lose billions of dollars a year to elder financial abuse, according to a survey conducted by Consumers Union, publisher of Consumer Reports magazine. While much of that abuse is unrelated to vehicle purchases, it is important for dealerships and lenders to watch for the signs that a buyer/borrower may be a victim of elder abuse because of financial effects on everyone involved.

“We have seen an uptick in activity and awareness with elder abuse investigations at SC and amongst our peers in the Auto Industry,” said Mark Kasak of the company’s EFM team.

RELATED

What you need to know about fraud risk – and why you should care (Part 1)

Identity fraud can take ‘enormous toll’ on your dealership profits (Part 2)

How to change the odds in your favor against application fraud (Part 3)

What straw buyer fraud could mean to your dealership and how to avoid it (Part 4)

One report in a small-town newspaper in Georgia recounted how the niece of an elderly couple obtained guardianship over her uncle and aunt, then discovered that a sitter had stolen money from them to put a down payment on a vehicle for her boyfriend. The niece also discovered that her uncle’s name was on the car loan, but that the title was in his and the boyfriend’s names. There was no indication that the car dealership participated in the fraud.

“Perpetrators of elder financial abuse are often family members, friends, caregivers or the common predatory scammer, but the result is usually the same,” said the Massachusetts Office of Consumer Affairs. “The victim is robbed of his or her savings or income and left in despair.”

Here’s what Santander Consumer USA’s Driving a New Model | A dealer guide to recognizing the warning signs of fraud, identifying suspicious buyers and taking action to reduce costs suggests to look for to reduce elder abuse fraud risk at your dealership:

The Red Flags

  • Buyer applies with an older adult to be the co-buyer
  • Older adult can’t come to dealership to sign contract
  • Older person makes statements like “I’m only here to help”
  • Applicant and co-buyer have different addresses
  • No reasonable benefit to the older adult in the vehicle being purchased
  • Older adult is on a fixed monthly income that does not support the vehicle payment

And the Checklist

  • Both applicants present at time of contract signing
  • Don’t allow the contract to leave the dealer premises
  • Ask about power of attorney and caregiver relationship
  • Ask older adult for independent references and contact the reverences

“Santander Consumer USA (SC) is committed to working with dealers to raise awareness of fraud and elder-abuse risks in the retail auto space,” says Driving a New Model, which was created by SC’s fraud management group. “Watching for red flags is the most cost-effective way of preventing fraud and reducing expenses related to fraud, reputation, regulatory and financial risks.”

This series, Driving a New Model, is aimed at helping dealers spot the red flags for identity fraud, application misrepresentation, straw buyers and elder abuse, and includes actionable checklists.

What straw buyer fraud could mean to your dealership and how to avoid it

Beware the straw buyer.

That is, a purchaser who looks like the real thing – but isn’t.

The buyer could be someone purchasing the vehicle for a consumer with disqualifying credit issues, or he/she could be “a criminal who is perpetrating a fraud scheme.”

Such as the Wisconsin man who authorities have charged with a dozen counts of money laundering that involved selling luxury cars overseas by defrauding local car dealers. Using dozens of straw buyers, the man allegedly secured $30 million in financing to buy the vehicles.

091818 IL What you need to know about fraud risk – and why you should care_V4“To a lender, a straw buyer might look like a real buyer,” wrote Frank McKenna, chief strategist at PointPredictive, a consulting firm specializing in fraud prevention. “[But] their whole purpose is to get a lender to give money to an organized group of crooks.”

As in the Wisconsin case, selling to a straw buyer or buyers can hit a dealer’s bottom line hard.

RELATED

What you need to know about fraud risk – and why you should care (Part 1)

Identity fraud can take ‘enormous toll’ on your dealership profits (Part 2)

How to change the odds in your favor against application fraud (Part 3)

“Lending to straw buyers/borrowers often leads to extremely high levels of default … In fact, most loans will default without a single payment,” wrote McKenna, who calculates that “at an average loss of $24,000 per fraud occurrence, your dealership is forced to sell 10 cars to make up for a single instance.”

Here’s what Santander Consumer USA’s Driving a New Model | A dealer guide to recognizing the warning signs of fraud, identifying suspicious buyers and taking action to reduce costs suggests to look for and to reduce straw buyer fraud risk at your dealership:

The Red Flags

  • Applicant is declined and then returns with a co-buyer
  • Co-buyer has a different last name and/or address
  • Applicant asks to take contract to co-buyer
  • Primary and co-buyer continue to change on the same vehicle application
  • Insurance policy lists multiple vehicles with different last names

And the Checklist

  • Both applicants present at time of contract signing
  • Don’t allow the contract to leave the dealer premises
  • Ask for references on both applicants, and contact the references
  • Ask who will be making payments while both applicants are present

“Santander Consumer USA (SC) is committed to working with dealers to raise awareness of fraud and elder-abuse risks in the retail auto space,” says Driving a New Model, which was created by SC’s fraud management group. “Watching for red flags is the most cost-effective way of preventing fraud and reducing expenses related to fraud, reputation, regulatory and financial risks.”

This series, Driving a New Model, is aimed at helping dealers spot the red flags for identity fraud, application misrepresentation, straw buyers and elder abuse, and includes actionable checklists.

High-powered, hurry-up offense features broad-spectrum lending play

The fourth quarter has arrived, and you’re still in the game.

But great teams finish strong.

With the holidays still ahead, your team has a big fourth-quarter opportunity to win in 2018 with an offensive strategy that will keep you on target.

Santander Consumer USA (SC), as an important part of your team, will bring every option to the game, including a hurry-up offense featuring broad-spectrum lending and aimed at achieving your sales goals before the final whistle blows.

100418 IL High-powered, hurry-up offense features broad-spectrum lending play_750x236

Although best-known as a subprime lender, SC has incorporated near prime into its offensive playbook. That should help put points on the scoreboard with more financing options for your customers.

“Santander has definitely widened its customer base in the past few months,” said Carlos Pedre of AutoNation Chevrolet Doral in Florida. “Definitely a much larger credit spectrum lender now. Long gone are the days when we looked at Santander only for the subprime customers.”

You call the plays, but it’s up to us to be key players in making it happen.

Here are the X’s and O’s for the hurry-up:

  • More financing options increasing your chances of scoring.
  • A pricing strategy calibrated to a dealer-favorable call.
  • Lower price and discount fee and a fresh approach to credit underwriting.
  • Flexibility on financing terms and increased dealer participation.
  • Most application responses received within seconds of submission reducing wait times.

“We are pleased to see great interest rates and exceptional customer service offered by SC to our customers with an A-plus credit rating, fast approval and funding process,” added Birol Karan, dealer principal at South Miami Mitsubishi. “We are lucky to have a business partner that accommodates not only the sub-prime but also the prime lending as well.”

Of course, luck is what happens when preparation meets opportunity.

“Santander is in it for the long haul,” said Elizabeth Guichardo, SC Dealer Relationship Manager in Miami, FL. “We are here as a full-spectrum lender to help our dealer partners finance all of their customers’ needs. By giving us an opportunity on every click, my dealers are seeing that numbers don’t lie and are sending us prime deals as well.”

“Our job is to help our dealers get their deals funded,” said one SC regional sales manager recently. “Putting more cars on the road is what we’re there for.”

“We simply offer an option to our dealers that they may be missing out on if they didn’t submit their apps to us,” said another SC player. “We’re providing another opportunity to make more deals happen.”

Even if you don’t choose SC for a particular play, at least you have that choice.

Leaving us on the sideline is not a good call.

U.S. vehicle sales mostly keep on truckin’ in 2018 despite lower expectations

The much-anticipated 2018 vehicle sales slump hasn’t happened yet. Now the question may be whether it will happen at all this year.

Despite predictions by many auto industry analysts that this would be a down year compared to 2017, U.S. vehicle sales keep on truckin’ in 2018 – thanks mostly to pickup and SUV sales.

Sales in five out of eight months through August exceeded same-month results in 2017.

Photo credit: Ford Motor Co. via NewsPress USA Ford F-Series and other pickups and SUVs are towing U.S. sales higher than expected.

Photo credit: Ford Motor Co. via NewsPress USA
Ford F-Series and other pickups and SUVs are towing U.S. sales higher than expected.

 

If sales continue at just over last year’s level for the last four months of the year, they actually would eke out a margin of around 170,000 vehicles over 2017 sales. That would be a 1 percent gain and put the year nearly on par with record-setting 2016 and 2015.

That also would not be a result anyone saw coming at the beginning of the year, with most analysts predicting a dip under 17 million and as low as 16.7 million.

For example, Cox Automotive recently raised its forecast to 17.1 million from 16.7 million in sales, matching forecasts of General Motors and LMC Automotive.

Here’s how the numbers could look for the rest of this year, based on data from the U.S. Department of Commerce’s Bureau of Economic Analysis:

  • If sales for the remainder of 2018 match the last four months of last year, vehicle sales could exceed 17.7 million, although those results included a record September.
  • Results will come close to 2015 and 2016 if sales this year match the end of those years.
  • If the last four months of 2018 match sales during the same period of 2014, this year still would top 17 million for the fourth time since then.
  • It would take the worst results since 2013 to come in as low as 16.8 million.

Although car sales have declined to less than 30 percent of total sales for the first time in history, trucks and SUVs are more than making up the difference so far in 2018.

The top-five selling models so far this year, for example, all are trucks or SUVs – Ford F-Series, Ram Pickup, Toyota RAV4, Nissan Rogue and Honda CR-V, with four of five selling more than last year. Pickups and SUVs also dominate the top 20 vehicles with 13, most of which also have more sales. The only passenger cars among the top-10-selling vehicles – Toyota Camry, Honda Civic, Toyota Corolla family and Honda Accord – have lower sales compared to last year.

There is potential turbulence ahead, such as tariffs, trade talks, gas-price uncertainty, vehicle-price increases, higher interest rates and lower consumer confidence.

“Despite generally good conditions, automakers are in for a rough finish to 2018,” Forbes magazine suggested based on an interview with a senior economist from Cox Automotive.

But that prediction has a tone similar to expert forecasts at the beginning of the year.

And we see how those have worked out.