3. Training and more training
Training got big traction in 2014, as dealers and lenders revved employee education programs in part to ward off potential problems with the CFPB and other regulators.
For dealerships, training was vital because F&I sales are often relied upon to offset thin margins on new-car sales.
Dave Robertson, executive director of the Association of Finance & Insurance Professionals, told Automotive News in fall his organization was swamped with demand from dealers for training and certification courses in compliance. In the fall, AFIP had a military-style display at a conference in Las Vegas touting the “boot camp” style training it’s offering around the country. AFIP brings the intensive course to venues nationwide rather than asking trainees to come to AFIP’s Texas headquarters or take the course online.
Dealerships also are interested in learning how to accommodate shoppers who do most of their research online, Steve Amos, president of F&I vendor GSFS Group, which has a substantial training business, said in an interview.
“Dealers have customers who are doing more and more of the transaction online before they get to the dealership. We’ve developed a curriculum to build good, solid procedures for customers who are doing a lot of their business online.”
Lenders bulked up on training, too. The National Automotive Finance Association, a trade group for subprime and nonprime auto lenders, said that in 2014 it had its first graduates of a new certification program for lender employees who monitor compliance with state and federal regulations, including dealership compliance.
4. E-contracting surge
“Surge” was an overreach. E-contracting is gaining, but year-over-year growth comparisons are tougher to make this year than they were in 2013, when e-contracting was just getting off the ground at some lenders.
Last month, Mark Singleton, Reynolds and Reynolds senior vice president, called it the “slowest adoption of a killer application in history” at a conference of the Electronic Signature and Records Association.
Analysts say cost and old-fashioned resistance to change are barriers for lenders and for dealers. In addition, many states require proprietary forms, some of which require “wet ink” signatures.
A bright spot: At Toyota Motor Credit Corp., which serves the Toyota, Lexus and Scion brands, e-contracts likely will account for about 70 percent of volume this year, estimates Jason Zahorik, Toyota Financial Services e-contract manager, up from about 60 percent last year and “basically zero” in January 2013.
5. More subprime growth
Subprime lending had room to grow this year to reach pre-recession levels, which in the third quarter of 2009 reached 39.2 percent of outstanding auto loans. But subprime growth has flattened. In fact, subprime loans lost a fraction of a percentage point of share in the third quarter this year, accounting for 38.69 percent of all outstanding auto loans vs. 38.74 percent in the third quarter of last year, according to Experian Automotive.
Within that total, the deep-subprime category -- composed of borrowers with credit scores of 500 or below -- gained slightly in the third quarter to 3.84 percent of outstanding loans, from 3.57 percent in last year’s period.
