Barrett Teague, Black Book’s new vice president of lender solutions, says dealership F&I managers are never far from his mind.
In part that’s because he’s been an F&I manager himself. He’s also just finished a stint as consumer banking manager for the Dealer Financial Services Division at SunTrust Banks Inc.
Teague, 43, joined Black Book, of Lawrence, Ga., on April 6. The company is a widely consulted industry source for vehicle pricing information, including used-vehicle values and forecasted residual values on new vehicles. Dealerships use Black Book pricing data to benchmark prices on trade-ins and vehicles acquired at auctions.
Teague’s new role is to work with lenders, but how lenders use Black Book data also has a direct effect on dealerships, he says. For instance, pricing data affects how much appetite lenders have for certain makes and models.
Teague spoke with Automotive News Special Correspondent Jim Henry by phone this week.
How does your new job affect dealers?
At dealerships, the thing that jumps out the most from a finance perspective is that they are most concerned in the finance office with PVR [F&I revenue per vehicle retailed], customer satisfaction scores and turnaround time. After spending time in the showroom, dealerships want to get loans and leases closed faster.
What’s Black Book got to do with all that?
We provide lenders the ability to do all those things. For instance, using our pricing data [lenders] are likely to offer rate discounts on used products or enhance lease residuals on certain models.
How does that appetite get communicated to dealers?
The lenders generally provide sheets to dealerships spelling out their programs, and we may help a lender to create a new program. This could also be in the form of strong loan-to-values and such for the dealers. The positive piece here is that I understand the challenges finance people in a dealership are going through.
[Editor’s note: “Loan to value,” the relationship between the size of a loan and the value of the vehicle, is usually called a ratio, but it’s typically expressed as a percentage. A loan-to-value of more than 100 percent means a lender would lend more than the value of the vehicle. That’s often used to finance negative equity on a trade-in or to finance ancillary F&I products.]
At the bank, the underwriters who worked directly with dealerships worked for you, right?
Yes, I had direct-line responsibility for underwriting staff and a dotted line to sales. In the underwriting role, we would be watching people and grading them on how they’re doing. Are they adhering to all the policies and procedures, regulatory as well as internal? There are so many regulations, what with the CFPB [Consumer Financial Protection Bureau], the OCC [Office of the Comptroller of the Currency], this alphabet soup of agencies that regulate us.
You said pricing data speed things up for dealers. How are things done now vs. before?
In the early 1990s, and before most dealerships even had a finance office, they had three-ring binders for multiple lending institutions. Say you wanted to provide a lease; you might have to look in four, five, six different places and hope to find a residual that would give your customer an affordable payment.
Have you worked at a dealership yourself?
I worked as a finance manager at a Honda-Acura dealership in Wilmington, N.C. That was in the early 1990s. I’d love to think one of my strong points coming here is my close familiarity with what dealers have to do through in order to sell cars.
You can reach Jim Henry at firstname.lastname@example.org