He spoke with Special Correspondent Jim Henry by phone last week.
How did 2011 go, and what's the outlook for 2012?
For the most part, it's looking like 2011 ended up about where we expected. There was growth in near-prime and nonprime. From a leasing standpoint, we think there's some opportunity across the company to grow that business a little more.
You've added a lot of dealers over the past couple years. Is that on the agenda for this year as well?
We don't really anticipate a lot of new dealer signups in 2012. We have already got the 4,500 or so GM dealerships. Obviously, that's our big opportunity, on the GM side -- new-car, APR [GM-sponsored incentives for low annual percentage rates] and leasing.
You're sticking with non-GM dealers, too, right?
Non-GM dealers were a big part of our business in 2011. We want to remain a relevant market share lender for that FICO range -- 500, 580, 600. We want to be a relevant lender to the dealers. As always, we will evaluate the credit and look at our pricing.
Stating the obvious, our growth plans there [with non-GM dealers] are not as large as on the GM side of the house.
As you know, one of the primary reasons GM bought us was for nonprime retail. It has certainly worked to have GM be a leader in that segment.
How about leasing?
Part of the task is to talk to GM dealers to educate them as to the benefits to the customer and the benefits to the dealership as to loyalty -- the benefits of lease returns and having the customer come back.
GM's residual values are improving, which should help.
Frankly, in the last couple of years, leasing became not as relevant in GM stores with the residuals they had. They're working very hard on that.
Some lenders worry about irrational competition. Are you seeing that?
There's not a lot of change in our approach to business. We don't want to be processing applications just to be processing applications.
We anticipate a relatively stable credit market. Most players at the top who do business in the 580 to 600 credit score range have weathered the storms. They know what the level of risks is, the trouble you can get in. LTVs now are under 110 and have been. [That is, lenders won't lend more than 110 percent of what the vehicle is worth.] I haven't really seen any big lender jump in and do anything irrational.
I mean, you get examples. Most of the big lenders have a scorecard that they follow, and we have a scorecard, too. [A scorecard assigns customers to a risk tier; interest rates increase as risk increases.] Sometimes we look at something somebody did, and I'm sure they're looking at some deals of mine and they're scratching their heads, too, but we price to the risk, based on those cards.
Credit quality has been good. That is, delinquencies are low, right?
That's probably the challenge. A lot of lenders are going after how they look at credit scores. No doubt delinquencies will probably go up. I mean, the 2009-2010 vintages have performed so well -- capital was a little tight, lenders were disciplined, a little choosy. In 2011 and going forward, people have greater access to capital.
What about aftermarket products? After GM bought the company, you had planned to introduce products of your own.
We have products that we call AmeriPlus, vehicle service contracts and GAP. We had those before [the GM buyout]. With so many other developments going on, we haven't had any lengthy discussions about that.
We haven't really talked about products that much. We're more focused on how to increase that 620 credit score and below nonprime range, and how to generate more interest in leasing, both in prime and in nonprime leasing.