Selected by CIO Review as one of the Top 20 Most Promising Automotive Tech Solution Providers in 2014.
By David Meyer, Executive VP
In past posts, I’ve blogged about the significant rise in subprime auto financing driven by the demand for vehicles from credit-challenged customers. Well, the most recent numbers are out and the subprime surge doesn’t appear to be tapering off.
According to the latest State of the Automotive Finance Market report, subprime and deep subprime loans accounted for over 57% of the market share in Q2. That’s up from 56.46% a year ago. Experian reported that a record 84.5% of consumers required financing for a vehicle purchase in Q2 — up from 79.7% in Q2 of 2008, before the recession hit hard. And many of those 84.5% of consumers needed subprime auto loans to get into their cars.
Reports include some other interesting numbers as well. The average amount financed was $26,526 for a new vehicle, and $17,913 for a used vehicle — indicating an increase in the value of vehicles sold as well. Average loan terms for Q2 were 65 months for new vehicles and 61 months for used. And the average monthly payment was $457 on a new vehicle, $351 for a pre-owned one.
So what do these numbers tell us? Yes, that subprime auto financing is still on the rise, that people are paying more for their cars, and that loan terms are expanding. But with the increase in opportunity for BHPH dealers, comes an increase in risk. Now is the time — while the news is good — to put a risk-mitigation strategy in place. A central piece of this strategy should be a GPS tracking and asset management solution proven to reduce delinquencies and defaults, keep customers on track with their payments, improve collection efficiencies, and lower the time and costs associated with repossessions if the need arises. All while continuing to allow you to offer more competitive terms and say yes to more customers with credit challenges.
Spireon’s GoldStar GPS is the automotive finance industry’s leading asset management and vehicle tracking solution. GoldStar GPS tracking devices capture and deliver vehicle tracking information in real time, making repossessions and vehicle recovery faster, easier and cost-effective.
But beyond GPS devices that enable vehicle tracking, GoldStar GPS improves asset management with a wide range of enhanced asset management features. These include automated payment reminders that keep customers on track; a remote starter enable/disable feature that allows you to disable a delinquent vehicle once it’s stopped; robust reports including vehicle histories that let you confirm STIPs; geofencing feature that allows you to set up a geographic boundary around a specific area such as a gated parking garage or impound lot and receive alerts when a vehicle enters or leaves those boundaries; and alerts whenever a vehicle has stopped for an extended period of time.
GoldStar GPS exceeds the average GPS tracking system by empowering you to not only minimize the financial impact of repossessions, but to reduce the need for repossessions altogether.
To learn more about GoldStar GPS asset management and GPS tracking devices, visit www.GoldStarGPS.com.