Lender raises dealer advance
DETROIT - In a bid to increase market share, Credit Acceptance Corp. of Southfield, Mich., has raised its dealer advance, the amount the subprime lender is willing to pay a dealer for loans originated by the dealer. The company said in its second-quarter report that it increased its dealer advance, including dealer holdback, from 50.9 percent of the contract amount to 55.6 percent. Net income jumped 85 percent in the second quarter, to $13.8 million. But that result included a one-time gain of $14.7 million on the sale of its credit reporting subsidiary, offset by higher income taxes and lower contract originations for the quarter.
ONYX EARNINGS UP
FOOTHILL RANCH, Calif. - Onyx Acceptance Corp., a growing lender in prime-risk and 'near-prime' auto loans, reported net income more than doubled in the second quarter, to $2.4 million. During the quarter, the company acquired an average of 124,691 contracts per month, vs. 76,553 in the year-ago quarter. Onyx had 656 employees at the end of the quarter, up from 449 a year ago.
BETTER SPREAD FOR TFC
NORFOLK, Va. - Subprime lender TFC Enterprises Inc. said its interest rate spread - the difference between its cost of funds and the rates it charges customers - improved on both sides of the equation in the second quarter. Because of higher pricing and a lower cost of funds, net interest revenue increased 40 percent for the quarter, the company said. Net income more than doubled to $3.2 million, vs. $1.3 million in the year-ago period. But because of competitive pressure, originations improved only 4 percent, the company said. TFC does business as The Finance Company, which specializes in auto loans to military members.
NAF HAS SMALLER LOSS
JACKSONVILLE, Fla. - National Auto Finance Co. narrowed its second quarter net loss to $1.7 million, vs. a year-ago loss of $3.5 million, even though loan originations fell sharply. After a restructuring that put a group of investors in control of the company in April, the subprime lender is using stricter credit standards.
FIRST INVESTORS GAIN
HOUSTON - Subprime auto lender First Investors Financial Services Group Inc. reported $2 million in net income for the 1999 fiscal year ended April 30, a 64 percent gain over the previous fiscal year. The company acquired Atlanta-based Auto Lenders Acceptance Corp. late last year.